One out of every five Americans older than 65 has been victimized by a financial scheme, according to the Investor Protection Trust, a nonprofit organization devoted to investor education.
It’s no secret that many fraud schemes target seniors because of their concentrated wealth and trusting nature. Your parents could be susceptible to rip-off artists. Take steps to help prevent your parents from being fleeced.
• Observe their behavior. If you live close to your parents, listen closely to any new friends, investment deals or sweepstakes they mention during your normal interactions. If you’re in a different city, try to stay abreast of your parents’ behavior by communicating with them frequently and by checking in with other family members or friends who have occasion to see your parents.
• Urge them to watch out for suspicious emails. You’ve probably seen them — the emails offering to “reward” you with huge amounts of money if you will only contact such-and-such from a distant country and then put up a “small” sum to initiate some ill-defined transaction. You probably “spam” these without a moment’s thought — and you should urge your parents to do the same. Remind them that any offer that sounds “too good to be true” is, without question, neither “good” nor “true”.
• Encourage them to further their financial education. Law enforcement agencies, health care professionals and reputable financial serices providers all offer personal financial management programs designed specifically for seniors. Look for these typs of programs in your area, encourage your parents to attend — and even consider going with them.
• Become familiar with their financial situation. Having a serious discussion with your parents about their finances may not be easy — but it’s important. The more you know about their investments, retirement accounts and estate plans, the better prepared you’ll be to respond helpfully if they mention an action they’re considering taking that, to you, just doesn’t sound appropriate.
• Suggest professional help. If your parents are already working with a qualified financial professional, they’re probably less likely to be victimized by fraud than if they were managing their finances on their own. And it’s a good idea for you to know their financial advisor, and for him or her to know you, as you may well be involved in your parents’ legacy planning. But if your parents don’t already have a financial advisor, you may want to recommend one to them, particularly if it’s someone you already know and trust.
Your parents may not need any assistance in avoiding financial scams. But your intervention could help preserve your parents’ financial independence.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.Information provided by Jim Talley, financial advisor at Edward Jones, 2703 Beaver Ave., 279-4179.