Retirement is a time to celebrate, relax and reap the rewards from decades of working. However, it can be hard to enjoy the fruits of your labor when you're being targeted for fraud. While scammers don't discriminate, the people most vulnerable to scams tend to be older adults.
According to a new study from the AARP, scams targeting older adults cost them more than $28 billion each year. From strange phone calls to fake sweepstakes wins, older people are faced with a variety of outside threats. Many retirees are living on a fixed income and cannot afford to fall for any of these scams. They need their money to last for their entire retirement, and in most cases, the money stolen from them is never returned, which could be devastating to their financial situation.
However, there are a few basic guidelines that can help older adults understand what to look out for to avoid becoming a victim.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Impostor scams.
One of the most common scams that older people face is impostor scams, specifically people impersonating government officials. In these scams, older adults will receive calls from people pretending to be officials with the Social Security Administration, the IRS or Medicare. They may ask for personal information like a bank account number or passwords. Scammers may go so far as to threaten victims with arrest or suspension of their Social Security payments if they don’t give them the information that they want.
If you receive a phone call from someone claiming to be a government official, it’s a scam and you should immediately hang up. Representatives from the IRS and Social Security Administration never ask for personal information over the phone and will not threaten legal action or demand money.
2. Grandchildren scams.
A scam that is becoming more common is the grandparent scam. This is when a scammer pretending to be a grandchild calls and asks for money. They will claim that they are in trouble and need money for bills or even say they were arrested and need bail money. Many scammers research social media pages or obituaries so they can share personal information to help convince the older adult that they are their grandchild.
If you receive a call like this, the first thing you should do is immediately hang up. Then you can call the relative the caller was pretending to be and see if they can verify they are ok. Don’t ever send money or gift cards to the imposter. A good tip is to come up with a code word with loved ones so if anyone is ever in real trouble you can ask for it over the phone so you know if it is an actual emergency.
3. Caregiver scams.
Many older adults have caregivers who live with them or spend a significant amount of time in their homes. These caregivers tend to have access to their clients’ personal information, making it easier for them to steal cash, credit cards or valuables. Some may even use this information to open up new credit cards or bank accounts to make purchases for themselves. Unfortunately, if the caregiver is related to the older person, many of these scams will go unreported because of the close relationship.
If you are hiring a caregiver for yourself or a family member, do your research. Make sure the person is licensed and comes from a reputable company. Ask for references and speak with people who have worked with them in the past.
Scams against older adults are scary and becoming more common. If you or a member of your family falls victim to a scam, the first thing you should do is report it to your local police department or sheriff’s office. If your case needs to be investigated further, they can refer you to the proper authorities. If you are worried about being scammed, educate yourself. By understanding what to look for, you can help protect yourself from becoming a victim.
Drake & Associates is an independent investment advisory firm registered with the U.S. Securities & Exchange Commission. This is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person who may view this report. Neither the information nor any opinion expressed it so be construed as solicitation to buy or sell a security of personalized investment, tax, or legal advice. The information cited is believed to be from reliable sources, Drake & Associates assumes no obligation to update this information, or to advise on further development relating to it. Past performance is not indicative of future results. Registration as an investment adviser does not imply a certain level of skill or training.
Related Content
- I’ve Been Scammed Twice: Here’s How You Can Avoid That
- ‘Simple’ Scam Messages May Fool Even the Most Discerning Eye: What to Know
- How to Spot a Social Security Scam (and What to Do About It)
- Five Biggest Frauds to Watch Out for in 2024
- Romance Scams That Target Older Adults Rising: What to Do
-
Cord Cutting Could Help You Save Over $10,000 in 10 YearsHow cutting the cord can save you money and how those savings can grow over time.
-
The '8-Year Rule of Social Security' — A Retirement RuleThe '8-Year Rule of Social Security' holds that it's best to be like Ike — Eisenhower, that is. The five-star General knew a thing or two about good timing.
-
You Were Planning to Retire This Year: Should You Go Ahead?If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get ItThe Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning PlaybookConsider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a RecessionRecessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income PlanningOnce you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.
-
Why Smart Retirees Are Ditching Traditional Financial PlansFinancial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around YouWhile thinking about succession planning might feel like anticipating a landslide (here's to you, Fleetwood Mac), there are strategies you can implement to manage the uncertainty and the transition.
