One important aspect of getting older is managing personal finances. Apart from social security, retired people over the age of 65 are limited to the wealth they’ve accumulated over a lifetime of hard work. Making those savings last through retirement is a concern, and so is passing something on to the next generation.
The good news is science shows that individuals retain their ability to make financial decisions with age. A study by the Columbia Business School found that “crystallized intelligence,” which remains largely intact with age, is most important to making sound financial choices. As a result, older people were found to make more responsible decisions about money than their younger counterparts. This can be credited to decades of experience and careful retirement planning.
However, one of the biggest threats people face as they age is the exploitation of financial scam artists. A 2009 study by MetLife’s Mature Market found that fraud costs older people $2.6 billion annually, accounting for theft and sham investments. A 2011 study by the National Committee for the Prevention of Elder Abuse found that figure rose to $2.9 billion, demonstrating the more insidious and widespread tactics criminals use to exploit people as they age. This figure is considered to be low, according to BankRate, because so much fraud perpetrated against people over 65 goes unreported.
Caregivers can be vigilant about these scams by educating care recipients about how to protect their personal information. Unfamiliar parties that solicit bank account numbers, credit card information or any other personal details can lead to cases of identity fraud. Sometimes, these scams can route social security payments into a criminal bank account.
“Be wary of any calls or emails requesting personal information,” says Teri Cettina of BankRate. “One ruse the thieves use: They tell the senior they need a bank account number so they can deposit big prize money in the account. The senior can take pre-emptive action by notifying the Social Security Administration to block all account changes not made in person at www.socialsecurity.gov/blockaccess. Seniors who suspect fraud can contact the SSA’s inspector general.”
Exercising caution when giving out personal information can help protect savings that care recipients depend on. When criminal identity fraud occurs, the process of recouping losses can be lengthy and fruitless, so averting risks on the front end is the best protection against scams targeting older people. When discussing these issues with care recipients, focus on the logical reasons not to trust third parties that request personal data. This can prevent significant problems down the road that can compromise quality of life.
“Don’t just tell your parent to hang up or throw out the letter,” explains Sid Kirchheimer of AARP. “Have a talk about why. You can’t win a contest you didn’t enter, Dad. You never have to pay fees to collect lottery winnings, Mom. Government agencies don’t make unsolicited phone calls and never ask for personal information — why would they? They’ve already got it on file.”
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