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The High Cost of Financial Exploitation and Tips to Prevent it

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Las Vegas slot machine early retirement and tips to prevent financial exploitation

AARP recently offered a webinar on “The Costs of Financial Exploitation & Tips to Prevent It”. It was a very interesting and eye-opening listen. One in five individuals fall victim to some form of financial exploitation. The average loss is $120,000, which for many can be their entire savings. And while you might say to yourself, “I’m smart and alert. I’m not going to let some stranger scam me out of my money.”, the research shows that it’s often not the strangers we have to worry about. It’s family and friends. 

I’m not bringing this up to scare you or to make you suspect of anyone. But AARP’s philosophy of “If you can spot a scam, you can stop a scam.” Is a good one. AARP mentioned during the webinar that being aware of scams makes a person 80% less likely to engage in one and if a person does start to engage, it makes them 40% less likely to be a victim. So, talking about scams, fraud, and financial exploitation is an important topic. 

Many of us are well aware of the Social Security Administration scams going on. But we’re already hearing about scams associated with the stimulus checks that we’re scheduled to receive. That’s right, we don’t even know when we’re going to get these checks and there are already scams in place to get them from us. 

The webinar pointed out five actions to look out for when it comes to financial exploitation. These might be actions that you want to discuss with family members or ask someone to review with you (so you stay alert as well).

  1. Pay attention to withdrawals, loans, and overall transactions. It simply makes good financial sense to have regular reviews of your expenditures. This can also be a time to take note of anything unusual in your spending and address it. This isn’t about a lack of trust. It’s about making sure that our financial affairs are in order. 
  1. Have two power of attorneys for checks and balances. It’s always recommended to have a power of attorney in estate planning. But I can see where it might make sense to have two. This can create checks and balances on financial decisions. It will take some conversations to figure out who those two people are – the last thing anyone wants to do is create friction. But it’s worth consideration. 
  1. Ask your financial institution if they participate in the BankSafe program. The AARP BankSafe Initiative provides training to employees at financial institutions to help them spot potential signs of financial exploitation. Researchers have found this type of training gives employees greater confidence in recognizing and reporting cases resulting in 12 times more money being protected per employee.
  1. Learn about third party requests for money. During these difficult times, it can be wonderful to give to organizations and individuals who need assistance. I’m not saying to stop. But it’s important to take a moment and do our homework about where we’re sending our money.
  1. Screen your phone calls. AARP continues to bring up this point. Phone calls are an easy way to scam people. The best way to avoid a scam phone call is to let it go to voicemail. If it’s a legit call, they will leave a message. Let your family and friends know that you won’t answer spontaneous phone messages. Recommend they send a text or some other type of message, so you don’t have to deal with scam calls.

PLUS! in addition to scams about stimulus checks, another popular scam right now involves the U.S. Census. Individuals posing as census workers collect information that can be used in identity theft. If you’re concerned about this, check out the video “5 Ways to Avoid a Census Scam” and share it with others.  

Talking about money is always a sensitive topic and no one wants to admit that they might have fallen victim to a scam. That’s why taking a preventative approach to financial exploitation is so important. Start the conversations early and get used to having open and honest conversations with people you trust. 

Retirement Savings Boost Due to Relaxed Rules

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wall art help with retirement

We don’t write a lot about retirement finances – preferring to leave that to the experts. But there are some recent changes worth knowing about regardless of when you plan to retire. And it’s definitely something you should know if retirement is a relatively short time in your future.

Of course, I’m referring to the Coronavirus Aid, Relief, and Economic Security Act or the Coronavirus Relief Bill as it’s commonly called. Just signed into law, this new measure is designed to stimulate the economy and offer economic aid to those negatively impacted by this global pandemic. 

The most visible benefit of the new bill is a direct, one-time payment to most adults. The actual amounts of each stimulus check depends on age and reported income so be sure to read up on the details. Best of all, the bill includes language that allows Americans receiving Social Security to obtain a stimulus payment as longs as they received a Social Security benefit statement (SSA-1099).

The aid package provides three provisions that can benefit your retirement financing.

  1. You can delay taking your Required Minimum Distribution (RMD) for most defined contribution plans when you reach the applicable age as indicated in the SECURE Act. This new law suspends those RMDs for all of 2020. It’s particularly good news since cashing out securities in a depressed market is not ideal. Of course, withdrawals are still allowed if you really need to make them.
  1. The bill allows you to borrow more against the money you have already saved in your contribution plans. Typically, you could borrow up to $50,000 or 50% of your vested account balance, whichever is less. This new measure will double that and allow you to borrow up to $100,000 against your existing savings.
  1. The Coronavirus Relief Bill allows struggling savers to take hardship distributions of up to $100,000 from retirement plans and individual retirement accounts in 2020 without the 10% early withdrawal penalty if you are under age 59 ½. Smart investors know that this early withdrawal is never ideal – but it is available if needed.

Planning your finances for retirement is not easy even in the best of times. As global economies struggle to deal with the outcome of this pandemic, many workers are rethinking their retirement plans. The hope, of course, is that recovery will be quick. These relief measures are expected to help those who need it the most.

Qualifications directly related to COVID-19 may apply so, before taking any actions, we recommend that you discuss them with your financial professional.

If you are looking for additional resources to help you during these difficult times, AARP has a few great articles including regular updates as significant events happen. Caregivers can find information on taking care of a sick relative or friend. Best of all, they include some great tips on how older adults can reduce their risk of illness. Stay safe out there!

Image captured by Sharlyn Lauby while exploring the streets of Havana, Cuba

Financial Scams: 6 Ways to Protect Yourself and Your Loved Ones

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wall art protect your heart like from financial scams

More than 1.4 million fraud reports were filed in 2018 according to the Federal Trade Commission (FTC). In those reports, 25% of people said they lost money and the total amount of losses reported was approximately $1.48 billion. 

I recently listened in on the AARP webinar “How to Protect Your Loved Ones from Fraud”. Don’t let the fact that AARP hosted this event lead you to believe that seniors are only people susceptible to financial scams. In the FTC report mentioned above, younger people reported losing money more often than older people. The bottom-line is financial fraud can happen to anyone. 

During the webinar, the speakers shared several practical takeaways about protecting against financial scams that we could all use. 

  1. Stay current with the news. Last year’s scams might not be this year’s scams. A good case in point is the phone call scam that’s supposed to be from the Social Security Administration. This scam is so prevalent that the Social Security Administration is issuing warnings about it. Both the FTC and AARP have fraud alert resources on their website so you can stay informed about the latest tactics from scammers.
  2. Heighten your awareness about financial scammers. During the AARP webinar, they discussed the psyche of a scammer and reminded us that scammers are looking for individuals who are vulnerable, trusting, and are perceived to have wealth or valuable items. This doesn’t mean we can’t be nice. It does mean we need to pay attention to the world around us.  
  3. Screen your phone calls. Protecting ourselves from financial scams would be easy if they identified themselves on our phone’s caller ID. Unfortunately, they do not. It’s sad to say but it could be in our best interests to send calls to voicemail if we don’t recognize the caller. If you choose to do that, let close friends and family know this is your standard operating procedure so they don’t worry if you don’t answer right away. 
  4. Practice good technology usage. Today’s technology advances are wonderful but that doesn’t mean we should abandon the principles of good technology usage. For instance, having strong passwords for our accounts – especially ones where we have financial information stored – is essential. Also, making sure that the software on our devices is up to date. Outdated software could expose devices to malware or security breaches, which can lead to identity theft. 
  5. Research the credentials of financial advisors. It can make a lot of good financial sense to tap into the expertise of bankers, accountants, and financial advisors. Sharing your financial status with others is sensitive and personal. Knowing that your financial advisors are bound by a professional code of ethics is key. Individuals in the financial services industry should be prepared to discuss with you their experience and credentials. 
  6. Monitor your credit report. Don’t forget that the Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies to provide you with a FREE copy of your credit report every twelve months. Other organizations use this information to evaluate your credit, insurance, employment, and housing. Even if you’re not planning to make a major purchase, make sure the information is accurate. 

My big takeaway from the AARP webinar was that these activities are things I should be doing anyway. We should stay current with the news. We should use technology, including our phones, in a safe and secure way. And we should check out the credentials of the people we work with. 

Consider this article to be a reminder of the things you should be doing to protect yourself from possible financial scams and fraud. Maybe you want to share this list with a loved one, so they remember to do these things as well. It’s easy to get settled into a routine and not be as diligent with keeping your software up to date. Or you ran the free credit report a few years ago but haven’t done it lately. Well, now’s the time to get back on track. No one wants to be the victim of a financial scam or fraud.

Image captured by Sharlyn Lauby while exploring the streets of Las Vegas, NV

7 Reasons to Learn About Medicare Early in Your Career

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sunset on the beach in Waikiki thinking about the answer to Medicare problems

Last year, I wrote an article about the importance of understanding Social Security early in life. Social Security is complex and it’s going to take a while to understand all of the nuances of the program. In addition, whether it’s an election year or not, Social Security is a program that is being talked about by both Democrats and Republicans. If you have an opinion about Social Security (and you should) then you will want to pay attention to what the candidates have to say and make sure your legislators know your views. 

A program that is often included in the same sentence with Social Security is Medicare. It’s a national health insurance program started in 1966. Medicare primarily provides Americans over age 65 with health insurance but it does also provide benefits to some younger people with disabilities. 

Medicare has four parts. Here’s a really high level overview: Part A covers hospital services. Part B covers doctors services. Part C is an alternative to Parts A & B called Medicare Advantage. And Part D covers prescription drugs. I’m sure you can already see how this is going to get complicated. 

AARP recently held a webinar series called “Making Sense of Medicare” that I thought was very interesting. In fairness to them, it by no means answered everything you might want to know about Medicare. But it did provide a good foundation that you can build upon. Here are a few of my takeaways from the webinar:

  1. Like Social Security, Medicare is age driven. The enrollment window for Medicare begins three months before you turn age 65 to 3 months after. You can sign up online or at a Social Security office. There are consequences if you don’t sign up within your enrollment window. 
  2. Unlike Social Security, Medicare involves making a decision. When you sign up for Social Security, that’s it…you sign up. Medicare involves making a decision: Do you want the Original plan or the Advantage plan? There are pros and cons to each. Good news though, neither plan has a pre-existing condition clause.
  3. The Original Plan offers more choices. Under the Original plan, you can choose any doctor. For some people, that is a very important consideration. It also means that your costs could be a bit higher. But having the freedom of choice could be worth it. Oh, and there’s no dental or vision. Individuals who choose the Original Plan often make up the difference by purchasing Medicare supplemental coverage.
  4. With the Advantage plan, you could have lower out of pocket costs because you’re working within the Medicare network of doctors, hospitals, etc. This could be frustrating because you have to find doctors and providers who will take your coverage. But the savings might be worth it.  
  5. Obviously, the decision about whether to go with the Original plan or the Advantage plan is entirely yours. Everyone’s medical and financial situation is different. The good news is resources are available. AARP has a Medicare Resource Center on their website. There’s also the State Health Insurance Assistance Program (SHIP), a network on free, one-on-one counseling and assistance, designed to help people navigate the complexities of Medicare. 
  6. Keep in mind that while Medicare could be years away for you, it’s possible you have a parent or loved one that is close to Medicare age and they might be looking for resources. The AARP Resource page and SHIP could be a way that you can help them. 
  7. You will want to plan on reevaluating your coverages every year. The good news is that once you make a decision, it is possible to change your coverage. Granted, there might be consequences, but it could be worth it. If you’re in the corporate world, then you’re familiar with the term “open enrollment”. Well, guess what? Medicare has open enrollment too. When you sign up for Medicare, plan on participating in open enrollment for the rest of your life. 

Health insurance has never been an easy subject and it doesn’t look like it will get any easier when we retire. That’s why it’s important to spend time learning about Medicare now. So, when it comes time to make health insurance decisions, we can make the best ones possible for ourselves and our families.

Image captured by Sharlyn Lauby during sunset at the Halekulani Hotel on Waikiki Beach in Honolulu, HI

What Is the SECURE Act and Why Should You Pay Attention

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typewriter showing Time to Hustle related to SECURE Act and retirement savings

Last month, the U.S. Congress passed a spending bill that included bipartisan legislation called the SECURE Act (aka Setting Every Community Up for Retirement Enhancement Act of 2019). The Act is focused on increasing the number of people saving for retirement and the amount they are able to save. The President signed the spending bill and the SECURE Act into law on December 20, 2019.

Like most new pieces of legislation, there are new things we don’t know and things we will discover over time. To get us familiar with the law, I’ve put together a round-up of articles on the subject.

What is the SECURE Act and How Could it Affect Your Retirement? I’ve become a fan of Investopedia’s daily electronic newsletter. This article from them shares how SECURE could change our individual retirement accounts (IRAs), 401(k)s, and required minimum distributions (RMDs). 

SECURE Act Alters 401(k) Compliance Landscape. You might not be a human resources professional like me but I often find the best way to learn about subjects is from the point-of-view of the person who has to administer programs related to them. This article from the Society for Human Resource Management (SHRM) explains how 401(k) administration will change.

The SECURE Act. Like the SHRM article above, the National Association of Plan Advisors (NAPA) has put together a resource page on the new law. It includes the actual legislation, news articles, etc. NAPA is an affiliate organization of the American Retirement Association, previously known as the American Society of Pension Actuaries. 

A new law is bringing big changes for retirement savers, especially parents. Michelle Singletary writes a nationally syndicated column focused on personal finance for the Washington Post. This article does a nice job of explaining the highlights of the law as well as some of the downsides to the new legislation. 

5 Things Affluent Retirees Should Do Now that the SECURE Act has Passed. Don’t let the word “affluent” in the title deter you from reading this piece from Kiplinger. Like the Washington Post article, the author provides practical suggestions for anyone who is retirement planning.

At times, retirement can seem so far away that it’s easy to push these articles to the bottom of the reading pile. Retirement planning is an important activity. At some point, we have to start carving out time for it. That way, when it’s time to take action, our learning curve won’t be quite as steep.

What do you think of the SECURE Act? What questions do you have about the new law? 

Help Your Employer By Taking Control of Your Retirement

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sign live life to discover referring to retirement

I ran across an interesting article on Workforce.com talking about “Employers’ Blind Eye for Boomers Slowly Opening to Retirement Realities”. While the article is focused on what employers can do keep older workers engaged, I think there are some takeaways for individuals planning their retirement.

One of the things that both employers and employees need to realize is that the retirement conversation doesn’t have to be “all or nothing”. And I think that’s hard. From an organizational perspective, companies often do not like to operate in shades of gray. They think that there could be a risk associated with it. 

Employees don’t always want to operate in the middle either. Especially when it comes to a big lifestyle change like retirement. They want security and who can blame them. So, instead of waiting for your employer to tell you what they can offer, why not start thinking about what you can and are willing to work with. Here are a few suggestions:

  1. Know your rights. While some employers might start dropping hints about “getting older” and “planning for retirement”, it’s important to know what your employer can and cannot do. The Age Discrimination in Employment Act (ADEA) ensures that older workers receive equal and fair treatment in the workplace. It protects most workers forty years of age and older from arbitrary age discrimination while on the job and it seeks to support the employment of older persons based on their ability rather than age.
  2. Have a work stop date. Even if you decide to change it, start thinking about when you would like to 1) slow down and 2) stop working. That way you can control your plans. It’s possible the company will ask you to consider staying longer than you originally planned. Are you open to that? What conditions would make that a good decision for you? Same goes for having a slow down date. Maybe simply reducing your work schedule will be a perfect way to transition to full retirement.
  3. Think about changing work responsibilities. If you decide to reduce your schedule, the company might rework your job responsibilities. This shouldn’t be a surprise. The organization has to get the work done. But honestly, you don’t want your job to turn into something you don’t enjoy. Think about what tasks you currently do that you love and wouldn’t want to give up, even with a reduced schedule. Also think about how you would accomplish those tasks if you didn’t go into the office every day. 
  4. Think about changing responsibilities at home. With more time at home, comes changes to our daily lifestyle. While Keith and I don’t have children, I know of several people who have retired (or semi-retired) and become babysitters for their grandkids. Some of them love it. Others were hoping for more time to do things on their bucket list. Our happiness at home is often connected to our happiness at work. If you’re thinking about creating a retirement transition plan, think about what it means for your home life.
  5. Consider the budget. Any type of change at work and home means looking at finances. How much income do we anticipate? Can we afford to cut back financially? Are there expenses we need to re-evaluate? A successful transition to retirement includes a financial transition. It’s better to discuss lifestyle changes before you’re forced to make them. In fact, it could make sense to test drive some changes like cutting the cable cord or buying gently used clothing from PoshMarkbefore you need to so it’s not as dramatic. 

The point here is that waiting until someone else brings up retirement puts you behind in the negotiations. Be prepared to discuss what you want and when you want it. That way, when an opportune moment presents itself, you can go for it. Keep in mind that you have colleagues around the same age who are trying to make plans as well. I’m not suggesting you throw a colleague under the bus, but to get a win for everyone, people need to know what they want.

Your retirement exit strategy doesn’t have to be a one-way conversation. Employers can be very supportive if they know what you want and are willing to offer. 

Image captured by Sharlyn Lauby while exploring the streets of Atlanta, GA

Make Retirement Plans For Your Social Media Accounts

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Disney sign end of the line social media accounts

I’m going to talk about a subject that many of us don’t like to discuss – death.

I ran across a column in The Washington Post about “Facebook memorials”. It’s an interesting read about the different options that can come up when someone with a Facebook account dies and how you can pay respects online. You might want to check it out. My biggest takeaway from the article was that I need to have an opinion about what happens to my social media accounts when I die. Here are some of the things that I’ve started thinking about that you might want to consider as well:

Should I retire some social media accounts before? Granted, because of HR Bartender and Unretirement Project, I’m out on quite a few social media networks. But will I need to maintain all of them as I get older? Probably not.

How will I know when to retire a social media account? It’s easy to say that I might not need to be out on every social media network forever. That being said, I do need to think about what the conditions are for retiring a social media account. Right now, it’s kinda willy nilly. Oh, Google+ is shutting down? Okay, I’ll close my account. That logic might not be the same with Twitter.

How should I close an account? The answer to this question might seem obvious, but I’m not so sure. Some people close accounts by contacting the organization and officially “closing the account”. Others do it by simply not using it anymore. There are advantages and disadvantages to each. If you’re wavering on whether or not to use a social media network anymore, maybe it makes some sense to not use it for a while to confirm your decision. That way if you miss the interaction, you can easily go back.

Do I want and/or need a record of the account before I close it? Many social media platforms give you the ability to download your historical record. I must admit that I’ve never really utilized this option, but could it be worth my time to download my history before closing the account.? I honestly don’t know. However, I do think it’s worth some research and a conversation. And if you do decide to get the record, what are you doing to do with it?

Who do I need to inform about my social media accounts? What I’m talking about here are logins and passwords. Chances are you’re going to change your password regularly between now and then, so you don’t want to have to notify family or friends every time you do. (And if you’re not planning to change your password, you should.) Have a place – like a password manager – where people will be able to easily find so that, in the event of your death, they can access your accounts and follow your wishes. 

I’m sure I’ve only scratched the surface of the things we have to consider when it comes to social media and our passing. But it’s an important conversation. Our identities are out there and the last thing any of us want is our identity to be compromised. So, we want to be able to enjoy social media while we can and put the pieces in place for it to be handled appropriately when we’re not here anymore.

Image captured by Sharlyn Lauby while exploring Disneyland in Anaheim, CA