Investors age 50 and above are overwhelmed by mutual fund choices, frustrated by complicated prospectuses and unsure of where to turn to advice. These were some of the key findings from a survey of investors in the Phoenix area by AARP Financial.
“Investing for retirement is unnecessarily complex, confusing and time-consumer,” said Richard M. Hisey, chief investment officer at AARP Financial. “As a result, many investors save too little, too late or too sporadically, while others stop saving altogether.”
Thirty-eight percent of the 176 people surveyed have $100,000 or less saved for retirement. Fifty-eight percent said they believe investing is too complicated for the average person and 63% said they are overwhelmed by investment options. More than three-quarters said prescription drug information, car insurance policies and DVD instructions are easier to understand than fund prospectuses; as a result, only 11% said they read the entire prospectus.
“Too much choice can stymie investors,” Hisey added. “In fact, research suggests the fewer investment options available in a retirement savings plan, the higher the participation rate.”
In addition, 45% said they were “unaware” or “not sure” of the fees they pay for mutual funds.