Elder financial abuse is an enormous problem in the United States. We have focused on this issue more than once recently. Many people understand that one of the biggest problems regarding financial elder abuse is that it is vastly underreported by victims of it. Clearly, shame and embarrassment are likely reasons for this underreporting. However, it may also have something to do with the belief that people have, and seniors in particular, about their ability to make financial decisions. There’s an old adage states that, “with age comes wisdom.” There’d be no reason to believe that this doesn’t apply to retirement finances. The conclusion reached in a recent study challenges that line of thought. The study went so far as to identify a new term for this potential problem: The Independence Myth.
Researchers at Fidelity Investments completed the study. Those interested in reading the description of it can find it here. The researchers surveyed 1,024 people between the ages of 50 and 80 who had a minimum of $500,000 in total assets and who worked with a financial advisor. The survey asked the respondents several questions relating to finances. The replies led to the following results:
In addition to surveying the group above, the researchers also questioned 1,043 adult children between the ages of 30 and 64. These respondents also had at least $500,000 in total assets and worked with a financial advisor. All of them had a living parent who was at least 60 years old. 80 percent of the adult children said that they wanted to help their parents manage their finances. Fidelity goes on to state that there are three “tipping points.” These relate to when children tend to get involved with helping their parents with retirement finances:
On average, age begins to become a factor for older Americans around the time they turn 75, However, there is no defined age where this occurs.
The study shows that there may be a bit of a disconnect between what older Americans have seen and experienced and how they view their own ability to manage their retirement finances. In short, they seem to understand that others will have trouble with this task, but they may not see those signs of trouble in themselves. This gap is what came to be termed The Independence Myth.
This is also the type of vulnerability that scammers and others who engage in financial elder abuse tend to exploit. When people believe that they have the wherewithal to handle financial decisions but may lack that wherewithal on some level, it can lead to exploitation and in some cases complete financial ruin.
As stated above, there is no uniform set of statistics that describe the scope and depth of elder financial abuse. However, Alliance Life Insurance Company of North America commissioned a study in 2014 – that was updated in 2016 – known as the Safeguarding Our Seniors Study. Researchers for that study asked questions of 1,000 people who were between the ages of 18 and 64. Each of the respondents were either actively providing care for elders who were at least 65 years old or would be in a position to do so within 5 years.
That study uncovered the following statistics regarding financial elder abuse:
This all adds up to an enormous amount of loss. True Link Financial reported that seniors lose more than $36 billion each year because of financial abuse.
If you have a loved one who is a senior, the best overall step you can take is to get involved. Don’t be afraid to talk about retirement finances with your loved one. Let that person know that you are available to help manage that aspect of his or her life. If you suspect that your loved one has been scammed in some way, you may need to ask more difficult questions. Doing so could bring an end to ongoing financial elder abuse and/or help prevent it from occurring in the future.
If you are a senior and you’re concerned about this problem, you need to remember that there is nothing wrong with saying no to requests. If you feel that something is too good to be true or if you simply do not trust the situation, then you need to trust your instincts. You should also have a trusted advisor in place – whether it’s a family member or a professional – so that you can discuss any of these specific situations objectively before making any financial decisions.
If you are a senior who has been scammed or you discover that a loved one has been exploited in this manner, you may have legal options available to you. In order to make an informed decision on how to proceed, contact a San Diego elder abuse lawyer at Gomez Trial Attorneys as soon as possible to schedule a free initial consultation.Posted in: Elder Abuse
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