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How worried are retirees about financial fraud?

When it comes to financial scams and other aging associated risks, retirees may be in denial.

Millions of elderly Americans – particularly retirees who have large nest eggs – are the targets of financial scams every year. Yet, despite being the most prone to elder financial abuse, less than a quarter (24%) of retirees worry they may become a victim of financial fraud, according to the Allianz Life 2021 Retirement Risk Readiness Study.

This low level of worry could be attributed to a number of different factors. For example, some elderly Americans may simply refuse to believe they could be taken advantage of, while others may think the issue is overblown (perhaps caused by underreporting of scams as a result of embarrassment or lack of understanding about how to report). But we know the issue is prevalent, particularly in times of high-stress or a crisis like the COVID-19 pandemic. What’s more, this risk of financial fraud can wreak havoc on a retiree’s financial security and undo years of saving and planning.

Unfortunately, the effects of elder financial abuse are not limited to the elder victim. While the study found that abuse victims suffered more than $64,000 in average losses, caregivers experienced a nearly equal loss, averaging just over $57,000.

Given the fact that more than 80% of respondents reported having either provided support as a caregiver or expect to at some point in the future, the fallout from elder financial abuse has the potential to affect an extremely high number of Americans in the coming years.

To help mitigate the risk of elder financial abuse, consider these tactics:

1

Specify a designated financial authority for any insurance contracts/policies.

2

Consult a licensed financial advisor or attorney before signing complex documents.

3

Build relationships with financial professionals who can help watch for suspicious activity.

4

Limit your use of cash. 

Checks and credit cards leave a paper trail.
5

Trust your instincts.

If you feel uneasy about a financial transaction, take time to reconsider it.

Facing other aging risks head on

Retirees face a number of other risks that go hand in hand with getting older. But according to the study findings, these risks don’t seem to be keeping them up at night:

40%

of retirees indicated concern about needing long-term care 

42%

worry about health conditions, such as cognitive decline, that will prevent them from being able to manage finances on their own

41%

worry about needing to move to an assisted living facility

As more Americans reach retirement age and face these aging risks, confronting any associated cognitive decline or healthcare problems becomes more challenging. But by learning more about these potential challenges, Americans can take steps to mitigate risks to their retirement security both now and in the future.

*Allianz Life conducted an online survey, the 2021 Retirement Risk Readiness Study, in December 2020 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k.

This content is for general educational purposes only. It is not intended to provide fiduciary, tax, or legal advice and cannot be used to avoid tax penalties; nor is it intended to market, promote, or recommend any tax plan or arrangement. Allianz Life Insurance Company of North America, its affiliates, and their employees and representatives do not give legal or tax advice. Customers are encouraged to consult with their own legal, tax, and financial professionals for specific advice or product recommendations.

Products are issued by Allianz Life Insurance Company of North America. Variable annuities are distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297.