​​​​​​​Fraud and Scams in Retirement

You've spent years saving for retirement. But there's one growing threat to those hard-earned savings that's easy to overlook: fraud and scams. Unfortunately, retirees are often prime targets for scammers. And with more sophisticated tactics emerging every day, it's more important than ever to stay vigilant.

Falling victim to fraud can derail your financial security in retirement, but there are practical steps you can take to protect yourself. Let's break down how these scams work and what you can do to safeguard your nest egg.

Why Are Retirees Targeted?

You might wonder why retirees, in particular, are frequent targets for fraudsters. The answer? Scammers often see retirees as having two things they want: savings and trust. Retirees typically have accumulated a lifetime of savings, and many may be less familiar with newer technologies that scammers exploit.

Moreover, older adults are often perceived as more trusting, especially of people who seem to be in positions of authority or who come across as offering help. Scammers use this trust to their advantage, crafting schemes that appear legitimate on the surface.

And here's the real issue: retirement means you're on a fixed income. Losing even a small portion of your savings to fraud can have devastating consequences, with little time to recover those losses.

Common Types of Retirement Scams

Fraudsters are creative, and their scams come in many forms. Here are some of the most common ones that specifically target retirees:

Phone Scams

You get a call. It seems urgent. The person on the other end claims to be from the IRS or Medicare, demanding payment for overdue taxes or medical bills. Sound familiar? It's one of the oldest scams in the book. The goal? To scare you into making a quick payment, often by wire transfer or gift cards.

Pro tip: The IRS will never call you to demand payment. If you get a suspicious call, hang up. It's better to be safe than sorry.

Email Phishing

You open your inbox, and there's an email that looks like it's from your bank or a government agency. They need you to verify some personal information - just click the link. Don't. That link? It's a gateway for scammers to steal your personal information, including bank account numbers or Social Security details.

Legitimate institutions will never ask for sensitive information through email. When in doubt, contact the institution directly - using a verified phone number or website, not the links in the email.

Tech Support Scams

Your computer freezes, and suddenly, a pop-up message says your computer is infected. It provides a number to call for help. You call, and the person on the line offers to fix the problem—for a fee. Then they ask for remote access to your computer. Before you know it, they have control of your device and access to your files.

These "tech support" scams prey on confusion and fear. Remember, reputable companies won't contact you out of the blue to fix a computer issue. If you suspect something's wrong with your computer, reach out to a trusted technician.

Investment Scams

Retirement often means looking for ways to grow your savings. Unfortunately, scammers know this and will promote "too good to be true" investment opportunities. Whether it's a Ponzi scheme or a fake investment in a hot new market, the goal is the same: to get you to hand over your money with promises of high returns.

No legitimate investment promises guaranteed sky-high returns. If it sounds too good to be true, it probably is.

Grandparent Scams

This one's particularly heartless. You receive a call from someone claiming to be your grandchild in trouble - they've been in an accident or arrested and need money fast. The person may even sound convincing, knowing just enough personal details to fool you.

The scammer is betting that your instinct to help will outweigh any skepticism. Before acting, verify the situation by calling another family member. It's better to double-check than to fall for a scam.

How to Protect Yourself from Fraud

The good news? You don't have to feel powerless. Here are some simple but effective steps to help protect yourself from fraud and scams:

Be Skeptical of Unsolicited Contact

Treat it with caution if someone contacts you unexpectedly - whether by phone, email or even at your door. Scammers often create a false sense of urgency to pressure you into making hasty decisions. Take a step back and evaluate the situation. Ask yourself: does this make sense? If it doesn't, don't engage.

Guard Your Personal Information

Your personal details - Social Security number, bank account numbers, and passwords - are like gold to scammers. Be extra cautious about where and when you share this information. Legitimate organizations won't ask for these details over the phone or through email.

Consider freezing your credit to prevent identity theft. This makes it harder for scammers to open new accounts in your name, protecting your financial security.

Use Strong, Unique Passwords

In today's digital world, a weak password is an open door for scammers. Use strong, unique passwords for each of your accounts, and consider using a password manager to help you keep track of them securely.

Also, enable two-factor authentication (2FA) wherever possible. This step adds an extra layer of protection by requiring not just a password, but a second form of verification, such as a text message or an app notification.

Stay Updated on Scams

Fraud tactics change all the time. The best defense is staying informed. Read up on the latest scams targeting retirees, and talk to friends and family about any suspicious activity they've encountered. The more you know, the better equipped you'll be to spot a scam when it comes your way.

Keep an Eye on Your Accounts

Check your bank and investment accounts regularly for unusual activity. If something doesn't look right, report it immediately. Catching fraudulent charges or withdrawals early can prevent a small issue from becoming a bigger problem.

Work with Trusted Advisors

When making financial decisions in retirement, consulting with trusted professionals - financial advisors, accountants, or attorneys - is always a good idea. These individuals can provide guidance and act as an extra layer of protection against fraud.

Make sure you work with certified professionals who have a good reputation. If someone contacts you claiming to be a financial advisor but pressures you to make quick decisions or refuses to provide detailed information, it's a red flag.

The Takeaway

Retirement is meant to be a time to enjoy the freedom you've earned and not worry about falling victim to fraud. While scammers are constantly finding new ways to target retirees, staying vigilant can go a long way in protecting your savings.

Remember, trust your instincts. If something feels off, it probably is.