If you go to cocktail parties or meet regularly with colleagues for a few years, then you almost certainly witness people speaking without knowing what they’re talking about. Humans are generally overconfident about their knowledge of everything, including personal finance. To help assess your personal financial IQ, here’s a 30-second quiz.
1. The Standard & Poor’s 500 index:
A. is up about 77% since March 23, 2020
B. is down about 17% since January 1, 2022
C. is up more than 50% over the past five years
D. all the above
2. The U.S. Index of Leading Economic Indicators
A. recently began surging
B. has declined for 12 straight months
C. signals a recession is likely
D. signals a recovery is likely
3. In February 2022, rules implementing the SECURE Act, which was signed into law December 2019, changed distribution rules on federally qualified retirement plans, including IRAs, and it will change retirement funding and estate planning decisions for millions of Americans.
True
False
4. It’s too late to fully fund your IRA or 401(k) for 2022 to save for retirement and lower your tax bill?
True
False
5. The $12 million individual estate tax exclusion will be slashed to $6.2 million ($12.4 million for married couples)
True
False
If you incorrectly answered 3 or more questions, congratulations on discovering that you’re not a financial wizard. Most people are not financial whizzes but they never know it. Knowing personal finance is not your thing can be a strength. Let us know if you want to delegate financial and tax planning to our firm. If you answered four or five questions correctly, let us know if you need help implementing a strategic plan.
Answers: 1 D, 2 C, 3 T, 4 F, 5 T