(This article previously appeared in the Minneapolis Star Tribune.)
America is aging; boomers are now moving toward their 60s and 70s. With the number of older Americans rising comes an increased risk that they may be defrauded of their life savings — sometimes by someone they know and trust, even members of their own family.
Friends and relatives of elder financial abuse victims said that half the time an incident occurred, it wasn’t reported. We also know from others that our mental acuity, particularly related to numerical and financial concepts, wanes as we age, making older adults more susceptible to financial exploitation.
Elders who regularly talk to a third-party resource about their finances feel they are better able to identify and prevent elder financial abuse.
How to Stop the Growth of Elder Financial Abuse
Although there is no single solution for stopping elder financial abuse, there are tactics that can help slow its growth.
The most effective way to help safeguard yourself, if you’re over 60, is to bring the issue to light. Simply put, make it a priority to talk to friends and family members you truly trust.
One way to do this: keep at least two people in your life clued in to your financial situation. Give them a general sense of where your savings and investments are, and discuss any big transactions.
These trusted people need not be financial wizards, but they can help identify the information you need to evaluate a financial decision. A third-party professional (such as an attorney, accountant or financial adviser) also can play an important role in connecting elders and caregivers with resources to protect them from financial abuse.
We found that elders who regularly talk to a third-party resource about their finances feel they are better equipped, more confident and better able to identify and prevent elder financial abuse.
An objective third party can be very valuable to detect when an investment scheme is too good to be true or when a family member’s request for a loan or sizable gift is not appropriate. Since the majority of elder financial abuse comes from family, friends or caregivers, as opposed to strangers, elders can use the extra set of eyes to be more confident that they’re getting the right advice.
Unfortunately, our research indicated that seniors are reluctant to turn to others for help. Even among older people who have already been a victim of financial abuse, only 8 percent were currently discussing their finances with another person. And less than a quarter told us they were keeping in touch with others on a regular basis to protect themselves from future abuse.
The physical and mental changes that accompany aging differ widely from person to person. So how can you know if you or a loved one is losing financial acuity?
4 Signs Someone’s Losing Financial Acuity
It’s important to have people close to you who can help catch the signs. According to the National Endowment for Financial Education, here are four indications that someone isn’t handling numbers as well as they used to:
- Taking longer than usual to pay bills or file income taxes
- Having trouble finding specific details in a bank statement
- Having difficulty figuring a tip at a restaurant
- A new interest in get-rich-quick schemes that the person might never have entertained when younger
The perpetrators of elder financial abuse are getting more sophisticated and aggressive with their tactics, so it’s crucial that elders and their family and friends be vigilant in watching for red flags — such as irregularities in financial accounts and unusual transactions — but also that they stay informed about current scams. The more awareness people have about the types of fraud targeted at elders, the better prepared they can be to take the appropriate action.
The key message for seniors is, don’t be afraid to lean a little on others for assistance.
Now that we know that financial skills may start to wane as we get into our 70s and 80s, it’s prudent to have a few people ready to back you up when you need it. After all, losing any amount of your life savings at a time in life when you can’t go back to work again is a frightening prospect. Don’t let it happen to you or someone you care about.
Walter White is president and chief executive of Allianz Life Insurance Co. of North America. In 2014 Allianz Life conducted its 2,200-person Safeguarding Our Seniors Study, which explored elder financial abuse and its impact on Americans.