Retirement should be a season of life when you’re able to enjoy the financial benefits of all your hard work. However, it is estimated that roughly 67 percent of senior adults in the U.S. are the targets of online identity theft and other scams.
It’s important to understand that cyberattacks are not inevitable—and you can avoid online scams if you implement small but effective financial protection measures for seniors. From securing your assets from a potential scammer to making decisions with your spending habits, here are four actions you can take right now:
1. Know Which Scams to Lookout For
The first step to safeguard your finances is spotting the red flags of a scam in the first place. Once you know the tactics scammers employ, it’s much easier to avoid falling into their trap. Financial protection for seniors begins with awareness and basic knowledge, so here are a few of the most common scams used to prey on senior adults:
- Grandparent Scam: A young adult will contact you and pretend to be your grandchild. This person will act as if they’re in trouble and in desperate need of money to bail them out of an emergency. They will beg you not to inform their parents but instead transfer money to a bank account number immediately.
- Sweetheart Scam: This is a tactic to be aware of if you’re single and use online dating websites. Someone will initiate contact with you on this platform, start a relationship, convince you of their romantic feelings, then extract financial support from you over time. Then, in most cases, they will cut off communication.
- Contest Winner Scam: You will receive either an email or call informing you of a contest that you’ve won. But to collect the prize, you will first need to pay for the taxes, insurance, and bank fees that come with those winnings.
- Charity Scam: A solicitor will contact you and pretend to work for a humanitarian aid organization. They will manipulate your emotions and urge you to donate relief money for the victims of a tragic natural disaster or a human rights atrocity.
- Home Repair Scam: Someone posing as a home improvement contractor will come to your door, then convince you to hire them for maintenance or repairs that you can no longer do yourself. However, in most cases, they will overcharge for this project on the front end, then leave without a trace before the renovation is complete.
2. Ask for Help when Spending
A recurring theme in all these scams is the attempt to elicit an impulsive or emotional response from you. When someone convinces you to make a snap financial decision with your heart—not your head—it’s easier to spend money in the heat of the moment.
There’s no shame in realizing you need a second opinion on these decisions from someone you trust. In these situations, ask a close relative, friend, or caregiver to offer you their unbiased perspective before finalizing a suspicious transaction.
It’s always helpful to bring in an outside person who cares about your welfare and can be objective on financial matters. There is absolutely no reason to feel embarrassed about this either—everyone needs extra guidance sometimes, regardless of their age.
3. Hire a Financial Advisor or Licensed Fiduciary
Consider hiring a professional expert who focuses on financial protection for seniors and is legally bound to act in your best interest. A licensed fiduciary’s job is to keep your assets and investments secure, while performing other crucial money management tasks for you, too.
A licensed fiduciary will monitor your spending for unusual or fraudulent activity, from handling your bills and expenses to overseeing your estate or securing your bank account information. This will decrease your chances of falling victim to any potential online scams or cases of identity theft.
You can also hire a financial advisor to support your investment portfolio and wealth management. You’ll need to vet the financial advisor before choosing to work with them (another common scam is pretending to be a financial advisor). Be sure that whoever you hire is certified by an official regulatory board.
4. Purchase Identity Theft Insurance Protection
If you are the victim of identity theft, plan with your insurance company to resolve the issue and reimburse any financial damage. Identity theft insurance will also safeguard your details online, so it’s harder for cybercriminals to track down. This is a secure, effective way to protect bank account information, social security or tax ID numbers, credit scores, and other sensitive data. Here are a few more tips to protect yourself from identity theft:
- Shred all non-electronic bank statements, tax forms, and other documents after use
- Use two-step passwords to secure login information on your accounts
- Use a passcode to unlock your computer or mobile devices if you lose them
- Contact your bank or credit card provider right away if a suspicious or unauthorized transaction is posted on your online statement, then freeze the card immediately
- Report a suspected case of stolen identity in the U.S. Federal Trade Commission’s website IdentityTheft.gov
Lower Your Risk of a Scam with Financial Protection for Seniors.
While you can’t guarantee a scam won’t cross your path, you can learn to spot the red flags and lower your own risk with planning. Financial protection for seniors is all about peace of mind—and it’s an investment worth making.