While there are several tools and benefits employers can provide their employees to assist in their retirement efforts, going a step further could be highly beneficial.
If they save properly, retirement should be smooth sailing for Americans. However, research from AIG Life & Retirement found that elder financial abuse is likely to compromise a retiree’s ability to live a long, financially secure life.
Heightening this concern, 47% of the 2,200 seniors 65 or older who were surveyed said they manage their finances — from paying bills to handling investments — entirely on their own. As a result, many seniors leave themselves vulnerable to financial abuse, whether through financial scams perpetrated by strangers or financial exploitation conducted by family or friends.
Employers can help their retired workers or those nearing retirement avoid these pitfalls, said Michele Kryger, head of elder and vulnerable client care at AIG.
“I see this as a big opportunity for plan sponsors, human resources departments to really be out there educating and providing materials,” Kryger said. “In some of the plans you have requirements for the plan administrators to sign off on distribution, but those that don’t really need to be aware of those red flags so they can identify an issue before something bad happens. I do think employers are in a unique position to be able to identify those red flags that might otherwise go unseen or unreported.”
Some other key findings from the AIG Elder Financial Abuse Survey include:
- Not only do many seniors handle money matters on their own, but only one in four invite a family member or someone they trust into conversations regarding their money (25% of seniors, compared to 21% of all adults).
- One protection against senior financial abuse is a durable power of attorney, yet 84% of all adults do not have or do not know if they have one in place (compared to 66% of seniors).
- Americans claim that if they were to fall victim to elder financial abuse, they would feel comfortable telling friends or family (81%) or a financial professional (80%) — but in reality, the overwhelming majority of cases go unreported. Nearly one in three (31%) Americans would not know how to report an elder financial abuse incident.
When asked about their knowledge of some of the most common financial scams, a majority of seniors did not have these threats on their radar:
- 60% were not aware of pigeon drop scams (victim is told that a considerable sum of money was found and will be shared with them if an upfront payment is received)
- 57% were not aware of romance scams (online romance where the victim is asked for money)
- 57% were not aware of invoice scams (victim is contacted by someone claiming to work on behalf of a company such as a utility to collect fees)
- 52% were not aware of pre-paid credit/debit card scams (victim is asked to make payments to a utility or other company to address a debt; often the victim is asked to make multiple payments)
- 10% were not aware of any of 10 common financial scams.
Employers can also assist their current workforce who might have retired parents who could fall victim to such scams.
“They can educate their employees on these red flags, but also suggesting putting those protections in place,” Kryger said. “I think once they feel their loved one has the right network of protections, they’ll feel more comfortable and they’re not worried on a day-to-day basis about their loved one.”
About the Author
Brett Christie is a staff writer at WorldatWork.