Thu, Jun 12, 2025, 2:00 AM5 min read

Most American adults are stumped by basic retirement-related questions.

That’s according to a new report from the TIAA Institute and the Global Financial Literacy Excellence Center at the George Washington University School of Business. Most quiz respondents bombed, big-time, when posed six questions related to Social Security benefits, Medicare coverage, employment-based retirement savings, ensuring lifetime income, and life expectancy in retirement.

On average, they answered two out of six questions correctly. But is this surprising?

“Decisions concerning Social Security and Medicare are not that simple and require people to collect quite a bit of information to develop a plan,” said Annamaria Lusardi, co-author of the report and a senior fellow at the Stanford Institute for Economic Policy Research (SIEPR). “For many people, Social Security and Medicare are not enough, and this is why it is alarming to see that the knowledge of how these institutions work is so limited.”

Curious about your retirement know-how? Take the abbreviated quiz below.

Many Americans expect Medicare, for example, will cover all of their expenses. “It's a shock to them that it doesn’t,” Surya Kolluri, head of the TIAA Institute, told Yahoo Finance. “And then it's a further surprise that if their income is high, they’ll pay higher premiums for Medicare Part B and prescription drug benefits.”

Why financial literacy matters: People who have a grip on retirement concepts are more likely to have a better shot at not outliving their money.

It’s no wonder many of us fall short. Only about 28 states have financial literacy requirements for high school students to graduate. It’s typically a one-semester course covering topics like budgeting, saving, and managing debt.

The real trouble begins when someone starts a job. Waiting to start a retirement savings account even for a year or so has lifelong consequences in terms of saving for retirement. Can you say compounding? “One of the places that could make an impact is if employers were to offer this education when young adults join the company,” Kolluri said. “It’s a perfect time."

It’s good to know how many years you have to save for. Only a third of Americans knew that, on average, in the US a 65-year-old man will live about 19 more years to age 84 and a 65-year-old woman about 22 more years to age 87, according to the report.

Learn more: How much should I have saved by 50?

Having a bead on how many years you might potentially need to finance after you step away from the workforce is key, Michael Finke, professor of wealth management and director of the Granum Center for Financial Security at The American College of Financial Services, told Yahoo Finance.