For those who have diligently prepared, the golden years of retirement promise a time of carefree living—traveling, enjoying hobbies and visiting with family and friends. But as an increasing number of retirees are discovering, those years are not without risk.
As Americans age, they are increasingly vulnerable to financial exploitation, commonly known as elder financial abuse (EFA). Although not a new problem, it is becoming more prevalent as our population grows older. By 2030, it is expected that 19 percent of Americans will be age 65 or older according to a report by the U.S Census Bureau. Left unchecked, EFA could devastate the retirement plans of millions of seniors and their families.
While many are aware of individual cases of EFA, whether among those we know or in the news, our research reveals the true magnitude of the problem.
More than one-third of active caregivers (37 percent) reported in the "2016 Safeguarding Our Seniors Study" the elder they care for has experienced financial abuse, with an average loss of $36,000. Half of those individuals classified the impact on the elder victim as “major financial loss/financial ruin,” and in many cases the loss had an equally devastating effect on the caregiver.
Unfortunately, the abuse often happens more than once; 40 percent of all active and potential caregivers report that the elder for whom they care experienced financial abuse a second time.
Where To Start?
The first step to stopping EFA is to acknowledge the potential for it to happen within families, and to talk about likely sources, including those closest to the elder. Financial topics are often taboo subjects within families, and breaking this taboo by openly discussing risks and vulnerabilities is critical.
If family dynamics prevent such an open discussion, seek out third-party experts who can provide an independent perspective. Trusted financial advisors, accountants, attorneys, clergy and other professionals can be a source of help.
These conversations truly matter because it is no longer a question of if, but when an elder will be targeted by an abuser. Expanding the circle of communication to include several observers is important, and given that abuse is not a “once and done” event, communication should be ongoing.