Here’s a disturbing statistic: One out of 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. If your parents are in this age group, should you be concerned? Can you help them avoid being “scammed” so they maintain control over their finances?
The answer to the first question is “yes” — you should be concerned. Most aging Americans aren’t being swindled, suggesting they can take of themselves. It’s no secret that fraud schemes target seniors because of their concentrated wealth and trusting nature. Your parents could be susceptible to rip-off artists.
Regarding the second question above, you can take steps to prevent your parents from being fleeced. Here’s a few suggestions:
• Observe their behavior. If you live close to your parents, listen closely to new friends, investment deals or sweepstakes they mention during interactions. If you’re in a different city, try to stay abreast of your parents’ behavior by communicating with them frequently and checking in with family members or friends who see your parents.
• Urge them to watch for suspicious emails. The emails offering you huge amounts of money if you contact such-and-such from a distant country, put up a “small” sum to initiate some ill-defined transaction. You probably “spam” these, and you should urge your parents to do the same. Remind them any offer that sounds “too good to be true” is neither “good” nor “true.”
• Encourage them to further their financial education. Law enforcement agencies, health care professionals and financial services providers all offer personal financial management programs designed for seniors. Look for these types of programs, encourage your parents to attend — and even consider going with them.
• Become familiar with their financial situation. Having a 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 if they mention an action they’re considering taking that doesn’t sound appropriate.
• Suggest professional help. If your parents are already working with a qualified financial professional, they’re less likely to be victimized by fraud than if they were managing their finances on their own. It’s a good idea for you to know their financial advisor as you may be involved in your parents’ legacy planning. 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.
It’s possible that your parents won’t need any assistance in avoiding financial scams. But be prepared to act on the above suggestions. Your intervention could help preserve your parent’s financial independence.
This article was written by Edward Jones for use by your local Edward Jones financial advisor.
Information provided by Karl Ritland, Edward Jones, 1100 N. Hickory Blvd., Suite 201, Pleasant Hill, 266-8188, www.edwardjones.com.