Holiday gatherings can be a financial security check


Getting together as a family is definitely one of the best parts of the holiday season. The chance to spend time remembering the past and eagerly awaiting what the New Year will bring is a big part of what makes holiday gatherings so special.

But connecting with family while on vacation can also be invaluable for more practical reasons, especially when it comes to checking on the health – both physical and financial – of older people.

In addition to the medical challenges of aging, older Americans are increasingly exposed to financial fraud which can severely limit their ability to enjoy their golden years. In fact, according to a recent FBI Internet Crime Complaint Center report, in 2020, 28% of the $ 4.1 billion stolen from Americans through online scams came out of the pockets of people over 60. That’s about $ 1 billion. ripped off seniors in 2020, an increase of about $ 300 million for the same demographic the year before.

It is unfortunate that many potential victims do not seem to understand the significant financial risks of aging.

According to 2021 retirement risk preparation study Allianz Life, while being the most at risk of being financially exploited by seniors, retirees said they were least afraid of being victims of financial fraud and scams. Less than a quarter (24%) of retirees said they feared being victims of financial fraud, compared to 42% of early retirees and 46% of near retirees.

The study interviewed three categories of Americans to obtain different perspectives on retirement: pre-retirees (those 10 years or more of retirement), near-retirees (those less than 10 years of retirement) and those who are already retired. Our research found that current retirees are in fact the least worried of all groups about the financial risks that can accompany aging and fraud. This not only includes fraud and scams that target the elderly, but also some of the major life changes that come with aging and can impact finances, such as health care risks and cognitive decline. . In fact, only 42% of retirees said they fear these risks are preventing them from managing their finances on their own, compared to 57% of early and near-retirees.

Additional risks with the aging of the population

These statistics are quite concerning, but the additional impact that financial abuse of seniors can have on caregivers greatly widens the scope of the problem. While the study found that victims of abuse suffered more than $ 64,000 in average losses, caregivers received an amount almost equal to an average of just over $ 57,000. Since more than 80% of respondents said they have provided support as a caregiver or expect to do so at some point as the population ages, the fallout from financial abuse of seniors can affect an extremely high number of people Americans.

While there is never a perfect time to bring up the taboo topic of finances with family members, it is important that these discussions take place regularly, even if it means taking a break from more festive holiday conversations. . Here are some tips you can share with your clients on what they can do to help protect loved ones from the financial abuse of seniors.

  1. Start small but listen to the big changes. Most people are hesitant to delve into the intimate details of their finances, but a high-level financial health check, focused on any new development, can reveal potential problems. Some red flags to watch out for include:
  • Sudden and excessive preoccupation with policy / contract values.
  • New beneficiary changes made without explanation.
  • Talk about liquidating assets despite penalties (for example, taking an annuity).
  • Nervousness or agitation when discussing financial matters.
  • Unusually large, frequent or urgent withdrawals.
  1. Familiarize yourself with current scams. When discussing the impact of fraud and scams, it is often more effective to have the conversation using current examples. You can learn more about the most common illegal schemes in your area with the Better Business Bureau Scam Tracking.
  1. Build relationships with a network of financial professionals. It is best not to place all of the financial responsibility on the elderly family member or their caregiver. If possible, develop a network of financial professionals, including a licensed financial advisor and lawyer, who can help you monitor suspicious activity. These professionals should also be consulted before signing any complex documents, including insurance contracts / policies.
  2. Develop a financial plan that addresses specific issues related to aging. Planning ahead is important, which means having a financial plan in place to help cover the rising costs of health care, expenses related to unforeseen illness or injury, and costs related to long-term care. potential or living expenses. This could mean considering, as part of your client’s overall portfolio, a retirement income solution such as an annuity to help cover these costs. Another option is a fixed index universal life insurance policy for the protection of death benefits as well as living benefits with accumulation potential that allows for a loan or withdrawal against any accumulation of cash value available in the cash flow. policy to help cover unforeseen expenses.

By connecting with your clients now and encouraging them to be proactive in their discussions about the risks of aging with their older family members, you can demonstrate the added value you bring to your relationship. Working with them to create a plan to help mitigate these risks not only benefits any senior at risk, but also protects your client from the significant financial impact that too often weighs on caregivers and extended family.

Kelly LaVigne is Senior Director, Advanced Markets, at Allianz Life. He can be contacted at [email protected].

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