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Retirement income quiz

When you understand what a lifetime annuity is, the benefits really add up. Take our quick quiz to see how much you know about retirement income and the role a lifetime annuity can play.


Living longer

Q1. The average 65-year old underestimates their life expectancy by:

Incorrect. According to research from National Seniors Australia, the average 65-year old underestimates their life expectancy by five years. Take a look at the research for more information.
Correct. According to research from National Seniors Australia, the average 65-year old underestimates their life expectancy by five years. Take a look at the research for more information.
Incorrect. According to research from National Seniors Australia, the average 65-year old underestimates their life expectancy by five years. Take a look at the research for more information.
Q2. Your costs for medical expenses, care and assistance are likely to decrease as you age:
Incorrect. Your social life may slow down in your 80s and 90s, but research from the Australian Superannuation Fund Association (ASFA) found that older retirees face increased costs for medical expenses, care and assistance in the home.
Correct. Your social life may slow down in your 80s and 90s, but research from the Australian Superannuation Fund Association (ASFA) found that older retirees face increased costs for medical expenses, care and assistance in the home.
Q3. With mortality improvements factored in, the average life expectancy of a 65 year-old male in Australia is:
Incorrect. Life expectancy rates published by the Australian Bureau of Statistics take into account the chances of survival until a certain age, but they don’t account for mortality improvements that are enabling each generation to live longer than the one before. Once this trend is factored in, a more realistic life expectancy of 87 for males and 89 for females emerges.
Incorrect. Life expectancy rates published by the Australian Bureau of Statistics take into account the chances of survival until a certain age, but they don’t account for mortality improvements that are enabling each generation to live longer than the one before. Once this trend is factored in, a more realistic life expectancy of 87 for males and 89 for females emerges.
Correct. Life expectancy rates published by the Australian Bureau of Statistics take into account the chances of survival until a certain age, but they don’t account for mortality improvements that are enabling each generation to live longer than the one before. Once this trend is factored in, a more realistic life expectancy of 87 for males and 89 for females emerges.

Sources of retirement income

Q4.  Payments from the majority of account-based pensions will continue after the balance runs out:

Incorrect. As each payment will draw from your super savings, your payments will generally stop as soon as your savings have run out.
Correct. As each payment will draw from your super savings, your payments will generally stop as soon as your savings have run out.
Q5.  According to National Seniors Australia, by how much on average did super balances drop during the GFC?
Correct. At the height of the GFC in 2008, superannuation balance falls of around 20% (according to National Seniors Australia) affected the majority of retirees at the time.
Incorrect. At the height of the GFC in 2008, superannuation balance falls of around 20% (according to National Seniors Australia) affected the majority of retirees at the time.
Incorrect. At the height of the GFC in 2008, superannuation balance falls of around 20% (according to National Seniors Australia) affected the majority of retirees at the time.
Q6.  If you invest in an account-based pension you can’t also invest in an annuity:
Incorrect. Annuities actually complement other retirement investments and sources of income such as account-based pensions.
Correct. Annuities actually complement other retirement investments and sources of income such as account-based pensions.

Retirement risks

Q7.  A full entitlement to an Age Pension will cover the costs of a ‘modest retirement lifestyle’ (as defined by the Association of Superannuation Funds of Australia's Retirement Standard).

Incorrect. A full Age Pension alone would not cover the costs of a ‘modest retirement lifestyle’ (as defined by the Association of Superannuation Funds of Australia Retirement Standard).
Correct. A full Age Pension alone would not cover the costs of a ‘modest retirement lifestyle’ (as defined by the Association of Superannuation Funds of Australia Retirement Standard).
Q8.  The impact of poor market performance on your super is greatest:
Incorrect. In retirement, timing is everything. If the order and timing of your investment returns is unfavourable, it could result in less money for your retirement. This risk can sometimes be referred to as ‘sequencing risk’. See an example of the effects of this risk here.
Correct. In retirement, timing is everything. If the order and timing of your investment returns is unfavourable, it could result in less money for your retirement. This risk can sometimes be referred to as ‘sequencing risk’. See an example of the effects of this risk here.
Q9.  Your income payments from an account-based pension are impacted by share market movements or interest rate fluctuations.
Correct. Payments are impacted by share market movements or interest rate fluctuations. Learn more about account-based pensions here.
Incorrect. Payments are impacted by share market movements or interest rate fluctuations. Learn more about account-based pensions here.

Comprehensive retirement income plans

Q10.  When it comes to our knowledge and decision-making capabilities, research shows we tend to:

Correct. We tend to overestimate our decision-making capabilities.
Incorrect. We tend to overestimate our decision-making capabilities.
Incorrect. We tend to overestimate our decision-making capabilities.
Q11.  Safety net income, as Challenger defines it, is:
Incorrect. Safety net income is a combination of the Age Pension and other income payments that are guaranteed and payable for life.
Incorrect. Safety net income is a combination of the Age Pension and other income payments that are guaranteed and payable for life.
Correct. Safety net income is a combination of the Age Pension and other income payments that are guaranteed and payable for life.
Q12.  Income from investments such as bank savings or shares are protected from inflation:
Incorrect. Income from investments such as bank savings or shares are not protected from inflation.
Correct. Income from investments such as bank savings or shares are not protected from inflation.

The benefits of guaranteed lifetime income

Q13.  Even if I live to 100 years old or more, I will still receive payments from a lifetime annuity:

Correct. Your regular payments from a lifetime annuity are guaranteed no matter how long you live, even if that’s more than 100 years old.
Incorrect. Your regular payments from a lifetime annuity are guaranteed no matter how long you live, even if that’s more than 100 years old.
Q14.  You can use your super or other savings to buy a lifetime annuity.
Correct. You can use your super or other savings to buy a lifetime annuity.
Incorrect. You can use your super or other savings to buy a lifetime annuity.
Q15.  An annuity provides an additional layer of protection in retirement because your payments won’t be affected by how share markets perform:
Correct. With the security of guaranteed lifetime income, you’ll enjoy a regular and consistent income no matter how markets perform.
Incorrect. With the security of guaranteed lifetime income, you’ll enjoy a regular and consistent income no matter how markets perform.

How did you do?

 

0-5 Questions correct (53% of people completing the quiz are in this category)

Like most people approaching, or in retirement, the changing and often confusing nature of the retirement income industry can seem quite daunting at first. However, investing just a small amount of time to learn about some of the fundamentals can really pay off today, or in the future. Our Guide to a confident retirement shows the first steps to doing this, and explains some of the more complicated parts of developing a comprehensive retirement income plan in plain English.

5-10 Questions correct (36% of people completing the quiz are in this category)

Whilst there's still a lot to learn about retirement income, you've got a solid grasp of the concepts and terminology used in the industry. Taking those last few steps to fully understand your retirement income could really make a difference. Our Guide to income in retirement goes into more detail about the topics these questions refer to, as we provide insights from our experts on how to make the most of your retirement income.

10-15 Questions correct (11% of people completing the quiz are in this category)

Congratulations, you are one of a small percentage of people who already understand a considerable amount about your retirement income and have no doubt already made significant steps to developing a comprehensive retirement income plan. If you would like to know what payments you could receive from a lifetime annuity to support your plan, use our payment tool to find out more.

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