Do you know what's in your retirement portfolio?

Quick: Name the stocks and bonds you're banking your retirement on.

If you can name even half of them, you're doing better than most. Although we're depending on retirement portfolios to get us through decades of life, studies show many people don't have a clue about what investments they own or how they're performing.

Financial research firm Hearts & Wallets interviewed 72 men and women with at least $250,000 in investible assets and found that most didn't know what they were investing in for retirement, Next Avenue reports. And these were wealthy Americans, too, the ones that might be expected to be more financially savvy than the rest of us.

Many in the group left the investing to someone else. They said that they couldn't remember the names of their holdings, only that their brokers recommended that they buy it. The investors were even more bewildered when it came to taking that next step: Turning that portfolio into income after retirement.

The study jibes with extensive research showing that many Americans are hapless when it comes retirement investing. They're buying individual stocks on a lark without doing the necessary research. They're paying fees for actively managed funds when they could be better off in index funds. They're plowing too much money into a single asset class and not diversifying.

Most investors don't understand even the most basic financial concepts, such as compound interest, inflation, or the differences between stocks and bonds, according to a 2012 report from the Securities and Exchange Commission.

Employers don't help much, either. In fact, many have shoved off responsibility for employee retirement plans entirely, shifting away from a corporate pension model to one where workers decide the fate of their own 401(k)s. They do so knowing full well that their workforce is not equipped to make the right decision. Only 1 in 5 big companies thought their employees made informed decisions about retirement saving, according to a study by benefits consultant Towers Watson and cited by Next Avenue.

The first retiring crop of the 401(k} era doesn't have nearly enough money for retirement. People close to retirement -- those over age 55 -- had an average balance of $165,200, according to Fidelity. That's not nearly enough.

Meanwhile, other measures of retirement savings paint a far bleaker picture. The median retirement account balance for all working-age households in the U.S. is $3,000, and $12,000 for near-retirement households, according to the National Institute on Retirement Security.

As this financial crisis starts to unfold, states and the federal government are worried that large numbers of financially unprepared seniors will lean on taxpayer funds for help. Some 17 states are looking at low-cost retirement plans that let workers save pretax money from paychecks, The New York Times reports. The Obama administration has also introduced the federal myRA program.

A big part of those plans will include teaching people how to save for retirement. That includes teaching them to be aware of what exactly is in their portfolios. "We need to do more to educate people about saving for retirement," Oregon's treasurer, Ted Wheeler, told The Times. "But education is not enough."

  • Kim Peterson

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