Seven Ways to Protect Older Adults from Financial Abuse
Scams are everywhere, and older people are prime targets. It’s critical to be vigilant, safeguard personal info, get paperwork in order and more.
![An older woman and her daughter look at a laptop together, looking serious.](https://cdn.mos.cms.futurecdn.net/eeXcGLsJdXWzUPen894bWH-415-80.jpg)
The sad truth is we all become more vulnerable to scams and financial abuse as we age into our later years. Here are some sobering statistics from Consumer Affairs:
- Older people are swindled out of more than $3 billion each year.
- More than 3.5 million older adults are victims of financial exploitation each year.
- Older people targeted by fraudsters suffer an average loss of $34,200.
As a financial adviser, I believe it’s crucial to ensure that our clients’ hard-earned wealth remains secure and protected from potential financial abuse. We can play a pivotal role in guiding our clients through the complexities of preventing elder financial abuse. Here are some insights I often share with clients and, with their permission, with their adult children, too, as they are often more concerned about scams and financial abuse than their parents.
1. Raise awareness.
A primary step in the battle against elder financial abuse is raising awareness. You must talk about the potential risks associated with growing older, including scams, fraudulent investments and exploitation by family members or caregivers.
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
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.
You can use your own experiences or trending news to start the conversation. A good resource is the AARP Scams & Fraud page with up-to-date information on fraudulent schemes and quizzes about scams.
2. Maintain open communication.
Just like meeting with your financial adviser quarterly, you should be talking about finances with your loved ones this frequently. We encourage honest and clear communication within families because this can lead to early detection and prevention of financial abuse.
Talking about money can be challenging for families, but an open dialogue helps identify unusual or suspicious activities related to finances that could indicate abuse.
3. Arrange for a durable power of attorney.
A durable power of attorney (POA) should be trustworthy and capable of managing their loved one’s finances if incapacitated. Speak with your financial adviser or elder law attorney about selecting the right financial power of attorney for your circumstances.
If you are a solo ager, your attorney may be able to act as your POA. See my previous article on Tips for Managing Money for an Incapacitated Loved One.
4. Get estate planning in order.
Another essential aspect of wealth management for older adults is estate planning. It’s crucial to discuss the importance of creating or updating a will, trust or estate plan. We advise clients to seek legal counsel to understand the legal protections available and explore options for safeguarding your assets. Not only does this protect your assets, but it also ensures that your wishes are followed accurately.
A well-structured estate plan can help transition wealth to the next generation.
5. Regularly monitor accounts.
Reviewing financial statements, bank accounts and investment portfolios monthly is essential. A few simple steps can help avert fraud, such as setting phones to send unknown numbers to voicemail, using a credit freeze and setting stricter privacy controls on social media. Signing up for financial account and credit monitoring helps detect any irregularities or unauthorized transactions.
It may make sense, in some cases, to allow a trusted loved one to also monitor your parents’ accounts, depending on their support needs and comfort level. Timely identification is essential to prevent financial abuse.
6. Safeguard personal information.
The digital world has increased risks, and scams abound online. Using strong, unique passwords is a simple yet effective measure to enhance online security. Consider using a password manager like LastPass, which offers a free password generator.
We also recommend steps like keeping documents secure, shredding sensitive papers and avoiding sharing personal information with unknown parties. These seemingly small actions can make a big difference in safeguarding against fraud.
7. Stay informed about scams.
Financial scams and elder abuse tactics evolve continually. The scams (e.g., romance scams, grandparent scams, investment scams, phone scams, sweepstakes scams, crime scams, Medicare scams, phishing, charity scams, funeral scams, IRS impersonation scams, counterfeit prescription drugs, malware, false investment opportunities, health product scams, home repair scams, lotteries, reverse mortgage scams, account takeover scam texts, cryptocurrency fraud, fake insurance and identity theft) are constantly evolving and regularly threatening older adults. The National Council on Aging (NCOA) explains some of the most common scams.
Vigilance is the key. Being diligent and partnering with an elder law attorney and your trusted financial adviser helps to stave off predatory efforts against older adults.
Related Content
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Financial adviser Tom West, CLU®, ChFC®, AIF®, founded Lifecare Affordability Plan (LCAP) to address a critical need for actionable planning that integrates finances, healthcare and senior housing. Tom has nearly 30 years of experience guiding families through financial and healthcare decisions. By bridging the gap between finance and healthcare, LCAP’s experienced team works with individuals and financial advisers to provide families with a financial strategy that meets changing healthcare needs while preserving the caregiver’s quality of life.
-
How Technology and Agile Are Reshaping Customer Experience in Financial Services
The future of financial services will be shaped by the integration of AI and Agile practices.
By Jabin Geevarghese George Published
-
Four Money Mistakes Even Good Grandparents Make With Grandkids
Of course you want to spoil your grandchildren. Who doesn't? You can do it in ways that won't teach them bad habits or set unrealistic expectations, though.
By Neale Godfrey, Financial Literacy Expert Published
-
Four Money Mistakes Even Good Grandparents Make With Grandkids
Of course you want to spoil your grandchildren. Who doesn't? You can do it in ways that won't teach them bad habits or set unrealistic expectations, though.
By Neale Godfrey, Financial Literacy Expert Published
-
What to Consider When Starting or Buying a Business
A business book author answers some key questions a budding entrepreneur might have before making the leap to small-business owner.
By H. Dennis Beaver, Esq. Published
-
Should You or the Trust Pay a Trust's Income Taxes?
Irrevocable trusts can be set up so that the trust maker no longer pays income taxes, and the taxes are instead paid by the trust. What are the pros and cons?
By Rustin Diehl, JD, LLM Published
-
Developing a Charitable Giving Strategy: Where to Begin
Knowing what to give, how to give and where to give can help ensure your charitable giving aligns with your values and maximizes your impact.
By Nicole Jackson-Leslie, JD, 21/64 Certified Advisor Published
-
How to Score a Hole in One With Your Retirement Planning
The easy swing and follow-through of retirement planning starts with simple fundamentals. Start with your stance (aka your financial plan), choose the right club (aka asset allocation) and go from there.
By Evan T. Beach, CFP®, AWMA® Published
-
Is Your IRA an IOU to the IRS? Three Retirement Tax Strategies
These steps, including converting to Roth IRAs, using a Roth 401(k) and leveraging life insurance and annuities, can help reduce your taxes in retirement.
By William Decker, Investment Advisor Representative Published
-
One Retiree's Story of How She Built Her Retirement Nest Egg
One way to build wealth is to max out your company’s retirement plans, but doing it in tax-efficient ways can make an even bigger difference.
By Michael Aloi, CFP® Published
-
So That Car Accident Wasn’t Your Fault, Huh?
Insurance agents hear all the excuses, but speeding and distracted driving, especially when the weather is bad, are well within drivers’ control.
By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS Published