Guess how many people between the ages of 50 and 80 think that one day they won’t be able to manage their day-to-day finances?
Nine percent. And how many of them have watched friends or family lose that ability? Sixty percent.
This alarming conflict is reflected in a new study by Fidelity Investments, which also found that while many parents are leery of burdening their kids by asking for help with their finances, eight out of 10 adult children surveyed said they actually wanted to help.
All this is to say (1) we know you don’t want to have the money, aging and death talk, and (2) we know you don’t want to have it over the holidays.
But since that’s when you all get together, it’s a rare opportunity to broach the topic in person. The payoff is peace of mind — and, potentially, a line of defense against the legions of scammers who target the elderly.
Elder financial abuse is a serious problem. About 17 percent of seniors said they had been the victim of financial exploitation, according to a March 2016 report by the Consumer Financial Protection Bureau that cited recent studies. A 2011 MetLife study estimated that $2.9 billion a year is lost in elder financial abuse. And not all the abuse is reported. At the very high end, a 2015 True Link study estimated the loss at $36.5 billion.
In general, any irregular activity in an elderly relative’s banking records or financial activities is a red flag. Signals of possible trouble include excessive withdrawals, nonpayment of bills, missing deposits of pension or Social Security checks, repetitive payment of bills, unusual wire transfers, or a sudden or uncharacteristic burst of internet banking.
“The first thing I tell consumers and people within financial institutions — and people miss this all the time — is to take it seriously if the older person is complaining about something funny going on with their accounts,” said Elizabeth Loewy, general counsel for the financial monitoring service EverSafe and former head of the Manhattan District Attorney’s Elder Abuse Unit. (Fidelity offers EverSafe’s product to its clients at a discount.)
Starting a conversation about elder fraud may be uncomfortable, but framing it as topic for the whole family’s well-being can break the ice. (Photo: iStock)
At the DA’s office, Loewy found that ageism would lead people to pooh-pooh an elderly person’s complaints. “Often people were dismissed as paranoid, or just old, when they were right,” she said.
Financial services and software providers are working on new services and tools to help catch such abuses. Meanwhile, a clearer and more detailed picture of a parent’s finances can help you keep him or her financially healthy with the advancing years, even if the scammers never strike.