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.