7 retirement questions that even smart savers often get wrong

You've worked hard to save for retirement. But how much do you really know about the rules that could impact your hard-earned savings?

Social Security. Taxes. Medicare. Inflation. Required minimum distributions. These are just a few of the things that often have a big impact on your savings.

Some of the rules may surprise you. And others may have changed since you last looked. So, let's put your retirement planning knowledge to the test.

Take this quiz and see for yourself

Seven questions. Three possible answers for each. But there's only one correct answer!

Keep track of your answers, then check your score at the bottom of the article to see how much you really know about retirement.

Question 1: Social Security

You could file for your Social Security benefits as early as age 62, but if you delay until age 70, approximately how much larger would your monthly benefit check be?

A. 25% B. 50% C. 77%

Question 2: Taxes on Social Security

What percentage of your Social Security benefits could be subject to federal income taxes?

A. Up to 50% B. Up to 85% C. Up to 100%

Question 3: Roth retirement accounts

When you withdraw money from a Roth account in retirement, what income taxes do you pay if you meet the Roth withdrawal rules?

A. Federal income taxes only B. State income taxes only C. No federal or state income taxes

Question 4: Traditional IRAs and 401(k)s

When you withdraw money from a traditional IRA or 401(k), how will your withdrawals be taxed?

A. Withdrawals are generally tax-free after age 59½ B. Withdrawals are generally subject to ordinary income taxes C. Only your contributions are taxable – not your investment growth.

Question 5: Inflation

If inflation averages 3% a year, approximately how much purchasing power will $100,000 have in 20 years, measured in today's dollars?

A. $75,000 B. $55,000 C. $40,000

Question 6: Medicare premiums

Can your Medicare premiums increase if your retirement income increases?

A. No. Everyone pays the same premiums. B. Yes. Higher income can mean higher premiums. C. Medicare premiums increase only if you're still working.

Question 7: Required Minimum Distributions (RMDs)

When you reach age 73, approximately what percentage of your traditional IRA or 401(k) must you withdraw in your first year of required minimum distributions (RMDs)?

A. 2% B. 4% C. 8%

How did you do?

Here are the correct answers:

1- C — 77%. For people whose full retirement age is 67, waiting until age 70 instead of claiming at 62 increases the monthly benefit by approximately 77%. However, waiting isn't necessarily the best choice for everyone

2- B — Up to 85%. Depending on your income, as much as 85% of your Social Security benefits could be subject to federal income tax. (That doesn't mean an 85% tax rate.)

3- C – No federal or state income taxes. Qualified Roth IRA withdrawals are generally free from federal income tax and, in Utah, state income tax.

4- B — Traditional IRA and 401(k) withdrawals funded with pre-tax dollars are generally subject to income tax.

5- B — $55,000. At 3% annual inflation, $100,000 in 20 years would have purchasing power equivalent to approximately $55,000 today.

6- B — Higher income can mean higher premiums. Medicare Part B and Part D premiums can increase when your income exceeds certain limits.

7- B — At age 73, you must withdraw approximately 4% of your traditional IRA balance. That percentage increases as you get older, reaching approximately 5% at age 80 and 8% at age 90. And you will pay ordinary income tax rates on every mandatory withdrawal.

Whether you got all seven answers right or missed a few, here's something worth considering:

Knowing the rules of retirement is one thing. Knowing how to make them work for you is another.

After all, it's not just about how much money you've saved. It's about how much you get to keep, and how long your money will last.

That's where BOSS Retirement Solutions can help. They've helped over 55,000 area families plan for a better retirement. And right now they're offering a free, customized BOSS Retirement Blueprint.

This is a powerful tool that considers some of the most important decisions with retirement planning including reducing taxes, maximizing Social Security, generating income, reducing investment risk, paying for health care and more.

This written plan is customized to your specific situation. There's no cost or obligation whatsoever. So there's really no risk to take advantage of getting your own blueprint.

Schedule your free BOSS Retirement Blueprint by clicking HERE, or by calling 800-918-3015.

About the Authors: Tyson Thacker and Ryan Thacker are the founders of B.O.S.S. Retirement Solutions. They are published authors of the Amazon best-selling book, "The B.O.S.S. Retirement Blueprint, Your Guide to a Secure and Independent Retirement." Their award-winning firm has seven offices located throughout the Wasatch Front, and one office in St. George.

Advisory services offered through B.O.S.S. Retirement Advisors, an SEC-Registered Investment Advisor. Insurance products and services offered through B.O.S.S. Retirement Solutions. Information contained in this material is for informational purposes only. Actual results may vary. No statement contained herein shall constitute tax, legal, or investment advice. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of any individual. You should seek advice on legal and tax questions from an independent attorney or tax advisor. Our firm is not affiliated with the Social Security Administration, U.S. government, or any governmental agency.

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