The following words are all derived in some uniform way from names on Fortune magazine’s list of the 1,000 largest publicly traded companies in 2014. Your challenge is to discover the rule and unscramble the words to derive the names of the actual companies. Hint: The order of the words is not random.
Please email your solution to John Kador ([email protected]) using the subject line “Fortune 1000.” Deadline is March 1, 2015. One entrant with the most compelling solution (or a creative alternative) will receive a signed copy of John Kador’s How to Ace the Brainteaser Interview. Good luck to all.
Brainteaser #2: TEST YOUR RETIREMENT INCOME IQ
A recent quiz demonstrated that the retirement income IQ of most Americans is inadequate. Of the 1,000 people tested—aged 60 to 75 with at least $100,000 in assets—not one scored an “A” (getting more than 90 percent of the items right). In fact, most of the respondents got less than 60 percent right. Can you do better than your clients? Here are seven items from the quiz conducted by the American College of Financial Services:
1) A 65-year-old man has an average life expectancy of approximately an additional:
A. 10 years C. 20 years
B. 15 years D. 25 years
2) What is the proportion of the population that is going to need assistance with activities of daily living (i.e., need long-term care) at some point?
A. 10% B. 25% C. 50% D. 70%
3) Withdrawing 20-40 percent of a retirement portfolio and buying a life annuity can protect against the uncertainty of life expectancy, ensuring that a basic level of spending is available throughout retirement.
4) Which of the following strategies is least likely to improve retirement security?
A. Saving an additional 3 percent of salary in the five years prior to retirement
B. Deferring Social Security benefits for two years longer than originally planned
C. Working for two years past the planned retirement date
5) Which one of the following statements concerning the federal income tax treatment of distributions to a 65-year-old retiree is true?
A. All distributions from a Roth IRA that has been maintained for more than five years will be tax-free.
B. All distributions from a traditional IRA will be taxed as long-term capital gains.
C. Distributions from a traditional IRA prior to age 70 1/2 will be subject to an additional 10 percent penalty tax.
6) Converting a portion of a traditional IRA into a Roth IRA is a good idea this year if ...
A. You have more taxable income than usual and your marginal tax rate is higher than normal
B. You have a big tax deduction this year and your marginal tax rate is lower than normal
C. The value of the assets in your IRA have remained the same for 10 years
7) Historically, which of the following generates the highest returns over a long time period?
A. Dividend-paying stock funds
B. Large-company stock funds
C. High-yield bond funds
D. Small-company stock funds
Solution to previous puzzler: ZIP CODE ODDS
To recap: What is the probability that a five-digit ZIP code has five unique numbers?
We received a few dozen responses and—congratulations—everyone nailed it to the second decimal place. The solution is 30.24 percent, or about one-third. The odds can be derived from: 10x9x8x7x6/10x10x10x10x10. Congrats to those who noted that not all five-digit ZIP codes are legally available. For example, ZIP codes that end in 00 are not assigned, which decreases the odds a bit. Congratulations to this issue’s winner, chosen randomly: Kim Niederhelman, senior registered client associate at Wells Fargo Advisors, Cincinnati.
SOLUTION TO TEST YOUR RETIREMENT INCOME IQ: 1. C, 2. D, 3. True, 4. A, 5. A, 6. B, 7. D
John Kador is the author of 20 books. His latest book (with Brian Cohen) is What Every Angel Investor Wants You to Know: An Insider Reveals How to Get Smart Funding for Your Billion-Dollar Idea (McGraw-Hill). www.jkador.com