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Retirement: fun facts and quiz
The essentials in 7 ideas, with fun facts, an illustrated story and a quiz to see how much you know.
The essentials
What Pensions Are
A pension is money saved during your working life to live on once you stop working. Many countries have a state pension, plus workplace and personal pensions.
Key fact
Starting early gives savings decades to grow.
Living Longer
People live much longer than a century ago, so retirement can last 20 years or more. That’s why pension ages are rising in many countries.
Key fact
Germany introduced one of the first state pensions, in 1889.
Workplace Pensions
In many workplace pensions, your employer adds money when you do. Not joining can mean turning down part of your pay.
Key fact
Employer contributions are like a pay rise kept for later.
Time Is Your Friend
Money saved at 25 has 40 years to grow before 65. Thanks to compounding, early savings can end up worth far more than bigger savings made later.
Key fact
Small, regular contributions add up over decades.
Making It Last
A common rule of thumb suggests withdrawing about 4% of your savings a year in retirement, so the money is likely to last around 30 years.
Key fact
It’s a guideline, not a guarantee.
State Pensions
State pensions are usually paid for by today’s workers’ taxes. As populations age, fewer workers support each retiree.
Key fact
In some countries there are fewer than three workers for every retiree.
A Good Retirement
Money matters in retirement, but so do health, friends and purpose. Many people volunteer, learn new skills or work part-time.
Key fact
Staying active and social supports health in later life.
Fun facts
“Pension” comes from the Latin “pensio”, meaning a payment.
When Germany’s state pension began in 1889, it started at 70, an age few workers then reached.
America’s 401(k) plan is named after the paragraph of the tax code that created it, in 1978.
Saving 100 a month from 25, at 5% growth, gives about 150,000 by 65. Starting at 45 gives about 40,000.
The 4% rule comes from a 1994 study by US financial planner William Bengen.
In 1981, Chile swapped much of its state pension for private individual accounts, a model other countries studied closely.
In Japan, more than a quarter of people are aged 65 or older.
Story: The Last Civil War Pension
The Last Civil War Pension
1924, North Carolina. Mose Triplett, a 78-year-old veteran of the American Civil War, marries a woman of 27. In 1930 they have a daughter, Irene.
Mose dies in 1938. As a veteran’s disabled child, Irene inherits part of his army pension: $73.13 a month.
She drew it until she died in 2020, 155 years after the war ended. It was the last Civil War pension ever paid.
True or false?
Tap your answer to see if you got it, and why.
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Question 1 of 10
Pensions provide income after you stop working.
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True. That’s their purpose.
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Question 2 of 10
Retirement can last 20 years or more.
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True. Thanks to longer lives.
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Question 3 of 10
Employers often add money to workplace pensions.
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True. On top of what you put in.
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Question 4 of 10
Saving early gives money more time to grow.
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True. Decades of compounding.
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Question 5 of 10
The 4% rule aims to make savings last around 30 years.
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True. A rough planning target.
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Question 6 of 10
State pensions are often funded by current workers’ taxes.
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True. Today’s workers pay for today’s retirees.
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Question 7 of 10
Staying social can support health in later life.
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True. Friendship is good for body and mind.
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Question 8 of 10
You only need to think about a pension on the day you retire.
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False. It’s built up over a working life.
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Question 9 of 10
Pension ages are falling everywhere.
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False. In many countries they’re rising.
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Question 10 of 10
Employer pension contributions come out of your wages.
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False. They’re added on top.
Keep going in the app
KnowSoda learns what you know and brings back what you’re about to forget. Retirement has 6 more ideas at the Advanced and Expert levels.
Sources
- OECD — Pensions at a Glance 2023
- UK MoneyHelper — Pensions and retirement
- Bengen (1994), determining withdrawal rates using historical data (the 4% rule), Journal of Financial Planning
- Deutsche Rentenversicherung — History of the German pension (1889)
- Statistics Bureau of Japan — Population estimates
- Social Security Administration — Life expectancy and the retirement age
- Norges Bank Investment Management — The fund
- OECD — Pensions at a Glance
