It’s no secret that retirement tax rules can be tricky to master, especially since they often change significantly from how our income was taxed during our working years. And if older adults find retirement taxes confusing, younger workers — who are decades away from retiring — likely feel less prepared.
A study by the Teachers Insurance and Annuity Association of America (TIAA) Institute, a financial research organization, and the Global Financial Literacy Excellence Center (GFLEC) recently highlighted this knowledge gap.
The study revealed that Generation Z (those born between 1997 and 2007) scored an average of just 29% on a “retirement fluency” test. By comparison, Baby Boomers (those born between 1946 and 1964) answered only 44% of the questions correctly.
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Inspired by this finding, we decided to look at a specific, crucial piece of the retiree puzzle: retirement taxes. Can retirement-aged individuals prove their experience, or will a younger worker surprise us?
To find out, we tested a Gen Z working professional (28 years old) outside the financial sector with five retirement tax questions.
That person scored a 40%. Now, it’s your turn. Good luck!
Hint: This quiz covers federal retirement tax rules and doesn’t include how states tax retirees.