Retirement plans can be compromised when senior citizens become the victims of elder financial abuse, which can cost them an estimated $2.9 billion per year. Here's how to prevent elder financial abuse, protecting retirement plans and other investments.
Melanie Stetson Freeman/Staff/File
It's called elder financial abuse and, unfortunately, it's a growing phenomenon that can put retirement plans and other savings at risk.
It costs senior citizens an estimated $2.9 billion annually, according to a MetLife study, a 12 percent increase from 2008. Elder financial abuse takes place when someone uses an elderly person's funds or property without authorization.
The perpetrator can be an outside scam artist offering phony investments or prizes. Even more troubling, it can be a caregiver, friend, or family member who steals cash or household goods, engages in identity theft, or misuses checks, credit cards, or other financial accounts.
Strangers are involved in 51 percent of the crimes, the MetLife study finds, while family members, neighbors, and friends take part in 34 percent of financial abuse cases. (Business and Medicare/Medicaid fraud accounted for the rest.)
Most victims are between the ages of 80 and 89, and women are nearly twice as likely to be victims of elder financial abuse as men. Most victims live alone but need some help with either home maintenance or health-care.
This threat is expected to increase as the population ages. In 2009, there were 39.6 million people 65 years or older, according to the US Administration on Aging. By 2030, that number is projected to nearly double to 72.1 million.
If you are a senior citizen, or help care for one, it is important to recognize the signs of financial abuse:
Here are some tips on how to prevent financial abuse of the elderly:
If you suspect financial abuse has taken place with an elderly friend or relative, contact the elder abuse helpline in your state.