Elder Financial Abuse Prevention: Strategies to Protect Your Finances
By Joe Dowdall, CFP®, RICP®, CRPC®, CCFC
For many retirees, their golden years are shadowed by a silent and devastating crime: elder financial abuse. It’s an epidemic that’s siphoning off more than $28 billion a year, victimizing approximately 1 in 6 people over the age of 60.
Often, victims don’t even realize it’s happening until it’s too late.
This article shares simple, practical ways to recognize the warning signs, safeguard your finances, and maintain control as you age.
Unmasking the Threats
Elder financial abuse comes in many forms and can be either subtle or overt. It’s not always as simple as someone stealing your purse.
Sometimes the signs are more discreet, such as money inexplicably vanishing from your bank account, a check you never wrote, or a new credit card appearing in your name.
Other times, it’s more direct, such as valuable items disappearing from your home or someone pressuring you to sign legal documents you don’t fully understand.
Keep a watchful eye out for these red flags:
- Unexplained financial activity: Sudden, unexplained withdrawals of cash or transfers of money
- New accounts: New loans or credit accounts opened in your name without your knowledge
- Sudden changes to your bank balance: A dramatic, unexplainable change in your bank account balance
- Changes to legal documents: Alterations to your will, trust, or power of attorney made without your consent or understanding
- Unauthorized check cashing: Someone else signing and cashing your checks
Any of these could signal that someone is trying to exploit your trust and financial standing.
A Wolf in Sheep’s Clothing
It’s a hard truth to face, but elder financial abuse often comes from those we know and love. The vast majority of these crimes are perpetrated by family members, including adult children, grandchildren, nieces, or nephews.
They may empty joint bank accounts, promising to provide care in exchange for money or property, only to vanish once they have what they want. In other cases, they may simply take what isn’t theirs, confident you won’t notice or speak up.
Fortifying Your Defenses
You have the power to defend yourself. These simple but powerful steps can make a huge difference in safeguarding your financial independence.
Build a Trusted Circle
Don’t go it alone. Find someone you trust completely. It could be a close friend, a family member, or a fiduciary financial advisor. While they don’t need full access to your accounts, they should be someone you can talk to if something doesn’t feel right.
If you have close family members you trust, involve them in your financial planning. Consider having regular family meetings to discuss major financial decisions. This kind of open communication can make it much more difficult for anyone to act in secret.
Safeguard Your Personal Information
Your personal and financial information is your most valuable asset. Guard it fiercely.
- Shred documents: Never simply discard old bank statements, medical bills, or any other documents containing sensitive information in the trash. Use a shredder to destroy completely.
- Be suspicious of unsolicited calls: Never give account numbers, passwords, or your Social Security number to someone who calls you out of the blue. Legitimate institutions won’t ask for this information over the phone.
- Use strong, unique passwords: Use different, complex passwords for each of your online accounts.
- Enable two-factor authentication (2FA): Whenever possible, set up 2FA on your retirement savings accounts. This requires a second form of verification, like a code sent to your cell phone, making it much harder for thieves to access your account even if they have your password.
These simple precautions are essential to help shield your information and enjoy a comfortable retirement.
Focus on Community and Vigilance
Isolation is a major risk factor for elder financial abuse. The more connected you are to a community, the more people you have looking out for you. Make an effort to stay socially active. Join a club, check out your local senior center, or simply pick up the phone and call a friend.
A robust social network provides more eyes and ears to spot potential threats and gives you more people to turn to if something seems off.
Get Personalized Advice to Prevent Elder Financial Abuse
By taking the preventative steps discussed above, you can create a powerful defense against elder financial abuse and feel confident that your retirement years will be spent in comfort and safety, just as they should be.
At Worth Asset Management, we offer comprehensive retirement planning services designed to help you enjoy your golden years without unnecessary financial interruptions.
Get started today with a 15-minute introductory call. I can be reached at (469) 423-1989 or by email at joe@worthassetmgmt.com.
Frequently Asked Questions About Elder Financial Abuse
What are the warning signs of elder financial abuse?
Elder financial abuse can manifest through subtle signs, such as unexplained withdrawals from bank accounts, unauthorized checks being cashed, or sudden changes in legal documents like wills or trusts. Watch for new accounts opened in your name or pressure to sign documents you don’t understand.
How can I protect myself from elder financial abuse?
To prevent elder financial abuse, build a trusted circle of family, friends, or a financial advisor. Safeguard your personal information by shredding documents, using strong passwords, and enabling two-factor authentication. Regularly monitor financial activity and maintain open communication with trusted loved ones.
Who is most likely to commit elder financial abuse?
Sadly, elder financial abuse often comes from those we know and trust, including family members such as adult children, grandchildren, or nieces and nephews. They may exploit their position of trust to steal funds or pressure victims into financial decisions that benefit them.
About Joe
Joe Dowdall is a CERTIFIED FINANCIAL PLANNER® professional at Worth Asset Management, a financial services company in Dallas, TX, that provides a wide range of wealth management services. With over 15 years in the financial services industry, Joe is a fiduciary who creates tax-focused financial plans for people nearing or in retirement—to help them build and safeguard their wealth through all life stages. He desires to offer clients the best financial planning experience while developing a friendship based on mutual respect. Joe’s philosophy as a financial planner is rooted in his experience as a teacher, where he learned the importance of explaining complicated concepts in understandable terms. He’s passionate about working with a select group of clients to help them achieve their financial goals with confidence and clarity.
Joe has an education degree from the State University of New York and an MBA in finance from Saint Joseph’s University. In addition, he has obtained the CERTIFIED FINANCIAL PLANNER®, Retirement Income Certified Professional®, Chartered Retirement Planning Counselor℠, and Certified College Financial Consultant (CCFC) designations. Joe resides in Frisco, TX, with his wife, Leila, and their two daughters. During his free time, he enjoys traveling with family, exercising, and hiking the national parks. To learn more about Joe, connect with him on LinkedIn.
The information provided is for general guidance and informational purposes only. Please consult with a qualified tax professional for advice tailored to your specific financial situation.