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If you are in or soon aiming for retirement, here are some things you probably should know. Let’s see if you do.

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If you are in or soon aiming for retirement, here are some things you probably should know. Let’s see if you do.

1.

A survey by IRALogix found that about half of retirees have no formal plan to withdraw money from their portfolios. Of those who did, the most popular annual withdrawal rate was less than 3%. What’s the longstanding rule of thumb for retirement withdrawals?

(Choose one.)

  1. 2%
  2. 3%
  3. 4%
  4. 5%

(Answer below.)

2.

According to Bankrate.com, about one in five retirees works part-time, averaging $900 a month in earnings. Workers receiving Social Security might lose some of their benefits until what age?

(Choose one.)

  1. 62.
  2. 65.
  3. 73.
  4. Their full retirement age.

(Answer below.)

3.

Social Security benefits automatically rise 2.8% in January 2026 in an attempt to keep up with living costs. How does that raise compare with the 2025 adjustment? 

(Choose one.)

  1. Lower.
  2. The same.
  3. Higher.
  4. There was no adjustment in 2025.

(Answer below.)

4.

Sequence risk refers to the potential damage a retiree can make to portfolio returns by withdrawing money from investments. What’s a reasonable way to minimize that risk?

(Choose one.)

  1. Automate withdrawals to regulate their timing.
  2. Convert all traditional IRAs to Roth IRAs.
  3. Include less-volatile assets in your investments.
  4. Evenly divide withdrawals among all funds.

(Answer below.)

5.

A recent survey of wealthy Americans shows generational contrasts in plans to pass along wealth. 53% of millennials surveyed and 44% of Generation X said, “I want the next generation to enjoy my money while I’m still alive.” What percentage of baby boomers agreed?

(Choose one.)

  1. 71%
  2. 62%
  3. 33%
  4. 21%

(Answer below.)

Answers

1.

c. 4%

Not intended for all retirees, 4% is a rule of thumb that suggests a simple formula by which investors can estimate how much cash flow their assets could safely provide them in retirement. For example, a couple with $500,000 in a balanced investment portfolio could afford to withdraw $20,000 a year (adjusting for inflation) to combine with Social Security, pensions and other income. In theory, the portfolio should generate enough returns over time to replenish the withdrawals. 

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2.

d. Their full retirement age.

You can keep working and still receive Social Security. But, if you’re younger than your full retirement age (between 66 and 67, depending on your birth year), and if you earn above a certain amount, Social Security temporarily reduces your benefits. After you reach full retirement age, Social Security boosts your benefit to give you credit for the past withholding.

Learn more

3.

c. Higher.

The 2.8% cost-of-living adjustment (COLA) is up from 2.5% in 2025. That’s because inflation was higher in 2025, according to the Consumer Price Index data used to calculate the raise. The 2026 COLA is below the 50-year average of 3.7%

Learn more

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4.

c. Include less-volatile assets in your investments.

A balanced portfolio allows a retiree to have more options for cash flow. That way, they don’t necessarily have to withdraw funds from an investment that still has growth potential. For instance, a portfolio that has 40% of its assets in fixed-income investments like cash and provides 10 years of 4% withdrawals while the other 60% can be left alone to grow.

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5.

d. 21%

The survey by Charles Schwab found younger generations more than twice as willing as boomers to share their wealth while they’re living. Boomers were three times more likely to say, “I want to enjoy my money for myself while I’m still alive.” More than half (56%) of all respondents said they started planning their wealth distribution once their net worth reached $1 million. Most have informed their beneficiaries, 92% communicating with their spouses and 78% with their children.

Learn more 

Compiled by Joel Dresang