Financial scams spoil prospects of retirement security

Respondents to a new survey highlight concerns that they’ll become financially vulnerable in their old age

Financial scams spoil prospects of retirement security

Longer life expectancies may translate into longer expected retirements, but that doesn’t mean people are anticipating their sunset years to be comfortable. With costs of living on the rise and certain retirement-planning pillars not as strong as they have been traditionally, it’s no wonder that more individuals are expecting to join the gig economy and or live with debt as retirees.

As if that weren’t depressing enough, individuals are also accepting the likelihood that they’ll be financially exploited in their old age.

In a new survey of 2,200 American adults commissioned by AIG Life & Retirement, Morning Consult found that 53% thought their ability to live a long, financially secure life will probably be undermined by elder financial abuse. Almost two thirds (65%) said the same thing about a close relative or friend.

Inadequate protections in place
Among respondents who were 65 years old or older, 47% said that they manage their finances entirely by themselves. One fourth (25%) said they invite a family member or a trusted person into conversations about their money, as opposed to just 21% of all adults. While a durable power of attorney could help protect against senior financial abuse, 84% of all adult participants and 66% of seniors either do not have one or are not sure they do.

Read also: Seniors more likely to be scammed by their family than strangers

The study also found a concerning lack of awareness of common financial scams. The majority of senior respondents (65%) said they hadn’t heard of pigeon drop scams, wherein victims are told they could have a share of a large sum of money if they were to provide some payment upfront.

Another 57% did not know about romance scams; the same number didn’t know about invoice scams, which have victims being contacted by someone pretending to collect fees for a utility service or other company.

And 52% did not know about prepaid credit card/debit card scams, which involve asking victims to make payments to a utility or other company ostensibly to address a debt.

Getting protected
Seniors and adult Americans generally understood that they need to protect their personal information and wealth. According to the survey, the majority were taking steps such as ignoring unknown requests to provide personal information (92% of seniors, 80% overall); not clicking on links emailed by unknown senders (89% of seniors, 78% overall); reviewing their credit report (65% of seniors, 57% overall); and setting up alerts from their financial institution (63% of seniors, 56% overall).

Working with an advisor also appeared to make people more vigilant. While only 16% of respondents said they had a financial advisor, such respondents were more than twice as likely to have a durable power of attorney, and 90% of them said they involved their spouse or significant other in conversations with their financial professional. In addition, two thirds said they consider their advisor a trusted contact.

The report also noted the importance of getting other parties such as family members, the government, and financial institutions involved in keeping seniors safe from financial exploitation.

“We all want to age with grace, maintain independence for as long as possible, and have the freedom to manage our money accordingly,” said Kevin Hogan, CEO of AIG Life & Retirement. “Longer lives and longer retirements often require a collaborative effort to help seniors protect themselves and ensure their savings can last a lifetime.”


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