With about 10,000 Baby Boomers turning 65 every day in the U.S., the demographic is proving to be a prime financial target for not only fraudsters, but also for family members and friends.
AIG Life & Retirement’s Michele Kryger told FOX Business that while elder financial abuse and exploitation is not a necessarily new problem, she is “seeing it more and more.”
“Baby Boomers have trillions of dollars in assets, that alone makes them more vulnerable to this,” Kryger said, adding that much of the money at stake is hard-earned retirement savings.
Financial exploitation refers to situations where seniors are taken advantage of by trusted people in their life, including family members, friends, attorneys, caretakers, etc.
More than half of seniors say that elder financial abuse will likely compromise their ability to live a long, financially-secure life, according to a new study from AIG Life & Retirement. Reaslistically, some could see their retirement savings completely wiped out.
Sometimes financial abuse comes from spouses, but it can also occur with children and grandchildren. Often these situations go unreported, Kryger noted, because people do not want to report loved ones.
When it comes to common scams, more money tends to be at risk when fraudsters are coming for the cash. However, seniors were largely unaware of some of the most popular ways criminals were trying to steal their money (like romance scams or pre-paid credit/debit card scams), the study showed.
One of the new scams Kryger has begun to see bubble up involves her clients receiving a call from someone who says a lien has been put on a property and will only be released for a certain sum of money.
These cases also go unreported. According to Kryger that’s due to a combination of factors, including embarrassment, fear caused by the fraudster and not knowing the proper channels for reporting incidences.
Compounding problems for older Americans is the fact that nearly half of them also manage their finances entirely by themselves, which has the potential to leave them more vulnerable to scams or financial abuse. Additionally, financial literacy can decline, along with overall cognitive ability due to the onset of certain diseases, which is why it is important to put protections in place.
Among the steps Kryger recommends seniors take to ramp up safeguards is implementing a system of checks and balances. That can mean having family members involved, having the power of attorney in place, along with a trusted contact or two.
She also said it helps to involve a financial adviser, who can pick up on potential red flags quickly.
“Not any one protection is enough to fully protect against financial exploitation and abuse,” Kryger said.
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According to lawmakers, older Americans lose an estimated $2.9 billion each year to scams alone.