With most things in life, you have to take control - retirement included.
With most things in life, you have to take control - retirement included. (Jeff Neumann)

You have to help yourself.

It's true with anything. Want to lose a couple of pounds? You'll have to do something about it. Have a lawn to mow? All you. Got an overwhelming pile of junk on your desk? Only you can work your way through it.

Whatever the challenge, the first step is always the same: Pick up the thing on the top of the pile and decide what to do with it.

Your retirement savings situation is no different, and there's a heap of evidence that says so. Earlier this year, for example, the Employee Benefit Research Institute released findings indicating that, for people in the lowest 25 percent of incomes, the simple act of using an online calculator decreased the likelihood of running short of money in retirement by between 14 and 18 percentage points.

On its face, it's simple: Calculate what you'll need, and then ... you'll know what you need.

And then you can do something about it.

With that in mind, we offer you this lighthearted financial literacy quiz to help you pick up wherever you left off learning about saving for retirement — even if you left off napping through a 401k informational meeting at the office. (We find this stuff strangely relaxing, too!)

What do you know?

This basic financial literacy quiz is based loosely on the Financial Industry Regulatory Authority (FINRA) financial literacy quiz. Some of it is not.

1. Suppose you have $100 in a savings account earning 2 percent interest per year. Meanwhile, I have $110 dollars stashed in a Troy Tulowitzki bobblehead doll. After five years, which of the following is true?

A. There's more money in Tulo's head than in your savings.

B. You have more money in your savings account than I do in the bobblehead.

C. We have the same amount of money.

2. Imagine that the interest rate on your savings account is 1 percent a year and inflation is 1.7 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today?

A. More.

B. Same.

C. Less.

D. Don't know.

3. Contributing money to both a Roth IRA and a 401(k) is which of the following?:

A. Tax diversification.

B. Redundant.

C. A "Tampa Two."

D. "Two Broke Girls."

4. Like many Americans, my home will be my largest single investment, and its value and associated costs can ultimately play a large role in how much I am able to save for retirement. I am considering a 15-year mortgage and a 30-year mortgage. Typically:

A. The 15-year mortgage will have higher monthly payments and the total interest over the life of the loan will be less.

B. The 30-year mortgage will have higher monthly payments and the total interest over the life of the loan will be less.

C. The two mortgages will have the same monthly payments but different amounts of interest over the life of the loan.

D. The two mortgages will have different monthly payments but the same amount of interest over the life of the loan.

5. True or false: Buying a single company's stock usually provides a safer return than a stock mutual fund.

A. True.

B. False.

6. True or false: Annuities always provide a guaranteed rate of return.

A. True.

B. False.

7. How quickly are you vested in your employer's retirement plan matching offerings (or stock options)?

A. One hundred percent vested after one year, per federal law.

B. One hundred percent vested after three years, per federal law.

C. Thirty-three percent at the end of each year until you're 100 percent vested after four years.

D. Twenty-five percent at the end of each year until you're 100 percent vested after four years.

Test your financial IQ: the answers

1.B: You have more money in your savings account than I do in the bobblehead.

You come out ahead thanks to compound interest.

After the first year, your $100 will earn $2 in interest, for $102. After the second year, your $102 will earn $2.04, for $104.04. In the third year, your $104.04 will earn $2.08, making $106.12. That, in turn, will earn $2.12, bringing it to $108.24 in the fourth year.

In the fifth year, it'll earn $2.16, making your grand total $110.40, a whole 40 cents more than the $110 I've got stashed.

The effects of compound interest are a bit more dramatic when there's more money involved. Add a few zeros to that initial balance, and you're talking about real money.

2.C: Less.

Your money, earning just 1 percent interest while inflation rates are at 1.7 percent, would buy a little less next year than it will this year. In other words, your purchasing power goes down when your interest rate is lower than the rate of inflation.

3.A: Tax diversification.

Contributing to both a Roth IRA and a 401(k) plan is an example of tax diversification, which many experts think is a good idea.

Mira Finé, a Denver-based certified personal accountant and national director of tax services at Hein and Associates, says to think of tax diversification as "diversification of the type of tax, on the bracket and on your investment flow."

It's not that complicated.

When you contribute money to a Roth IRA account, you contribute money you've already paid tax on, which means you won't have to pay tax on the eventual earnings when you withdraw from the account later.

When you contribute to a 401(k), it's usually pre-tax money, meaning you don't pay tax now, but you will pay tax later when you withdraw.

If you're doing both, you're hedging against the uncertain world of tax policy. Maybe policy in the future will be advantageous to you. Maybe it won't. Since you can't know, it makes sense to take some of the hit now and some later.

Depending on how much you're earning now and how much you intend to earn in retirement, the way you invest now could similarly affect which tax bracket you're in — a financial planner can help calculate that.

4. A: The 15-year mortgage will have higher monthly payments and the total interest over the life of the loan will be less.

According to Squared Away, "eight in 10 Americans choose a 30-year fixed-rate mortgage." But that's not necessarily because it's the best choice for most people. If you can afford higher monthly payments, a 15-year mortgage may save you money in the long run — and ease your retirement planning.

They've got a mortgage calculator at squaredaway.bc.edu to help you figure out if what has become the default mortgage is really the best one for you.

5.B: False.

A mutual fund is by definition is a diversified investment, and diversification is, generally, safer.

"If you're a person that picks stocks," says Finé, "there would have been maybe one day in the last 40 years that would have been the perfect day."

"You can't ever time what you're going to do," she says, adding that people kick themselves saying things like, "If I had only bought Google!"

"Well," she says, "you could have bought it two days before it dropped 100 points and it would have taken forever to recover those 100 points."

By buying stock mutual funds composed of many diverse types of stocks, you're more insulated from the unpredictable ups and downs of individual companies — or, for a more specific example, a kind of financial catastrophe sparked by unforseeable challenges at the company where you've invested all of your money.

6.B: False.

"It's driven by the market," Finé says. In other words, annuity payments are generally at risk, just like anything else is. And not all annuity plans are created equal.

Even if something offers a "guaranteed return," it's wise to regard it with suspicion. If it's paying out 6 percent but the principal isn't appreciating at least 6 percent, there's cause for concern.

"There are often times that [the so-called guaranteed return] is actually coming out of the principal," Finé says. "It's not necessarily a guaranteed income return. It's, for lack of a better term, a distribution."

Your move: Choose your annuity carefully (read the finest of the fine print) and keep track of your annuity's principal and growth rate for the duration.

7.Trick question!

(Sorry, but in a quiz about finances, it just seemed like there should be at least one.)

If your employer uses a vesting schedule for its matching offerings or stock options, it's up to them to choose what type of schedule to use — so you'll need to ask your HR department.

They might use immediate vesting, cliff vesting or graded vesting. Immediate vesting is what it sounds like; you own the matching funds (or whatever benefit you're looking at) immediately. So if your company matches a 5 percent contribution to your 401(k), and you're taking advantage of that, you immediately own their 5 percent contribution.

Cliff vesting means that, after some designated period of time, you go from owning zero percent of the matching benefit to all of the matching benefit.

Graded vesting means that you gradually own more and more of the benefit until you reach 100 percent.