AARP Finds Older Californians Overwhelmed by Retirement Saving

A survey from AARP Financial has found Californians over age 50 report being overwhelmed with too many choices, turned off by complex prospectus language and not sure who to turn to for advice, and are thus falling behind in their retirement savings.

The survey of 500 California residents age 50-plus found that 36% of pre-retirees saving for retirement have accumulated less than $100,000. Contributing to the savings crisis could be that 54% of the Californians surveyed think investing is too complex for the average person and many cite product design and industry practices as a source of confusion, AARP Financial said in a news release.

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The survey found poor communication is also an issue for many investors. More than three-quarters of Californian pre-retirees surveyed said a car insurance policy, instructions for a DVD player and prescription drug inserts are easier to understand than a mutual fund prospectus. Only a third of those surveyed said they read “all or most” of a prospectus before buying a fund.

In addition, more than half of investors surveyed said they believe that mutual fund companies put their own interests before those of their investors. Six out of 10 said they wish there was someone they could talk to about investing who “isn’t trying to sell me something.”

Also of concern, many investors said they do not check or do not know how to check mutual fund fees. Two out of five Californian pre-retirees surveyed are “unaware” or “not sure” of the fees they pay for their mutual funds.

Participants of the survey had to be at least 50 years old, have money saved for retirement and own mutual funds in their retirement portfolio.