Social Security vs. Retirement Savings Quiz

By: Staff

4 Min Quiz

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About This Quiz

Retirement in style is part of the American dream. It's hard to know exactly how to save your money over the years and how much you'll need for a comfortable retirement. How much do you really know about how your savings stack up?

All retirees are entitled to the same monthly Social Security payment.

Your Social Security benefits depend on your lifetime earnings, as calculated by the Social Security Administration. You can find the SSA's online benefits calculator with a quick online search.


Which of the following retirement accounts or services may not still hold money by the time you're 65?

A 401k or IRA is a personal investment account into which you pay money and can then reclaim it for retirement. Social Security is a tax-funded, government-run program that's currently under considerable financial strain due to increasing numbers of retirees.


Which of the following accounts is in no way connected to workers' monthly wages?

A 401k is an employer-sponsored retirement account, and Social Security taxes are withheld from workers' paychecks. Only an IRA is a fully personal account.


Where is the money for Social Security held?

Though lawmakers have suggested "privatizing" Social Security so that any overpayments could be invested in the stock market, excess Social Security monies are currently used to buy government securities.


Which of the following is closest to the average monthly Social Security benefit?

The Social Security Administration's published data shows that in November 2010, the average monthly retirement benefit was $1,174 per month.


Which of the following is most likely to benefit from employer matching?

A 401k is an employer-sponsored account. Some employers will match employee contributions to 401k accounts.


If you contribute to a 401k or IRA account, you need NOT contribute to Social Security.

No matter what additional savings accounts you have, law dictates that every worker must contribute to Social Security.


The law dictates that every American taxpayer contribute to a 401k or IRA account.

The law dictates paycheck withholding only for Social Security. Contributing to a 401k or IRA account is an individual's choice (though the government provides incentives in the form of tax breaks for doing so).


What is the most likely effect of retiring baby boomers on Social Security?

This is a highly contentious issue with no real answer. But with fewer workers paying into the system and more retirees claiming benefits, less money will be split more ways. Will benefits decrease? Will the government dip into defecit spending? Will withholding increase? Only time will tell.


Which of the following accounts could you short in order to take a vacation?

Contributions to 401k and IRA accounts are voluntary, so while it's not recommended by most experts, you could skip contributions to use that money for other purposes.


Which of the following allows the highest yearly tax-deductible contribution?

While you could theoretically contribute as much as you like to Social Security, there's not much logic in it. In 2010, the maximum contribution to an IRA was $5,000 and to a 401k was $16,500.


In what year does the Social Security Administration predict that the Social Security Trust Fund will be exhausted?

According to the Social Security Administration, the fund may expire by 2037. Visit for more details.


For what percentage of retired Americans does Social Security provide more than half their annual income?

According to the Social Security Administration, in 2004, Social Security benefits provided more than half the annual income for more than two-thirds of retired Americans.


Why do critics compare the Social Security system to a Ponzi scheme?

A Ponzi scheme uses contributions from new members to pay benefits for the (fewer) members cashing out. As long as increasing numbers pay into the system, it functions, but the system doesn't hold enough money to pay all participants.


Which of the following is a commonly proposed way to stretch existing Social Security monies farther?

The current age for collection of any Social Security benefits is 62. Some lawmakers propose raising this age.


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