BOSTON (CBS) – I have more questions for you from the Fidelity’s IQ Retirement Survey.

Question #6: About what percentage of your savings do many financial experts suggest you withdraw annually in retirement?

Answer: As a rule of thumb, Fidelity suggests limiting portfolio withdrawals to no more than 4-5% of your initial retirement assets, adjusted each year for inflation over the course of your retirement horizon. Although 40% of pre-retirees answered correctly, many of those over the age of 55 thought they could withdraw 7% or more of their savings annually, putting many at risk of quickly running out of savings in retirement.

Also, 15% of this age group felt they could withdraw 10-12%, a rate that could drain many households of savings in less than a decade.  While some new retirees make the mistake of withdrawing too fast, Fidelity suggests covering essential expenses with guaranteed income sources (like Social Security, pensions and annuities), while covering nice-to-haves (like travel or gifts to loved ones) from withdrawals from your investment portfolio.

Question #7: What do you think is the single biggest expense for most people in retirement?

Answer: For most Americans, housing, health care and transportation* are typically the largest expenses in retirement, but housing by far tops that list. In fact, for many retirees, housing can make up nearly half of their expenses.

Only 17% of respondents answered this question correctly.  Many respondents (69%) thought health care would be their largest expense. This is perhaps an indication of the deep concern many Americans have around an expense that is difficult to predict, since it involves the state of one’s health among other factors, including skyrocketing health care costs in recent years. Of note, health care was also the No. 1 item respondents were most worried about being able to afford.

*My observation: they forgot to mention food. How much will it cost in retirement?

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You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.

Subscribe to Dee’s Money Matters newsletter here.

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