Financial security and planning are a growing challenge faced by people of all ages; however, older adults have specific challenges that make the topic of finance more complicated. As people age, income often becomes more restricted, making budgeting more difficult. In addition, older adults are disproportionately victims of scams and frauds. Knowing how to detect scams and budget finances can help older adults continue living their lives at their fullest potential.
Age Friendly Seattle’s Civic Coffee on January 25, 2023 highlighted the importance of financial planning and fraud protection for older adults. This panel discussion encouraged us to think about how to stretch our money by planning and protecting ourselves financially. Kay Tomlinson, a volunteer AARP Fraud Watch specialist, and John McKenney, the financial education coordinator from the Washington Office of the State Treasurer, were the panelists who explored the relationship between older adults and finances.
John explains the two biggest financial hurdles that older adults face—not having enough income and wider economic issues. As older people retire, some still deal with the burden of credit card and mortgage debt. These payments put constraints on daily finances.
On top of this, people now live longer and healthier lives so older adults must plan for their finances to stretch farther into the future as well. Aside from personal finance challenges, unpredicted economic issues also cause a tremendous burden on older adults. Events like the Great Recession of 2008 and the recent COVID-19 pandemic highlight the importance of financial preparation and ample savings.
To combat financial hurdles, John encourages older adults to seek a financial advisor. Financial advisors are great resources to help people plan, budget, and find tips to stretch their finances the furthest they can go. There are also free online financial courses that can also help increase financial literacy. Overall, the most important money-saving action you can take at home is to revisit spending, cut back on costs, and take advantage of discounts and coupons.
Knowing how to budget is important but additional action must be taken to protect older adults from unexpected financial predators. Kay mentioned that fraud and scams with older adults can be complicated—there is a blurry line between free will and being taken advantage of. Oftentimes people who are being taken advantage of are willing participants, which can make it difficult to discuss. In addition, caregivers and family members are commonly the ones taking advantage of older adults. To combat this, Kay shares important tips to help older adults prevent financial exploitation and how to deal with it if it does happen.
The most common types of scams or fraud older adults can experience are imposter scams and identity theft. Imposter scams usually come via texts, calls, and e-mails posing as a government agency, utility, or company. These scams usually demand gift cards or wire transfers with a sense of urgency. Kay points out that the biggest red flag are messages that tell you to act immediately and do not give you the chance to talk about it with others. Another red flag to look out for are messages that claim you have won a prize or promise you something that is too good to be true. Knowing about and looking out for these types of messages helps the recipient make better judgments and can prevent them from falling into a trap.
Signs of identity theft include bank accounts being emptied, receipt of unrecognized bills, and welcome letters from companies opening a new account. One of the best ways to prevent identity theft is through password protection. Making sure passwords are long and unique is important. In addition, make sure not to share passwords across different accounts and to enable two-step authentications. These tips can help older adults protect themselves from predators looking for an easy target to take advantage of.
Kay and John stressed that older people are disproportionately targeted by scammers, and it is important to destigmatize asking for help when scams happen. Many scammers are well-trained and have done research on the psychology behind how to take advantage of people, which means we cannot victim-blame others for falling into traps. Being a victim of fraud has very little to do with someone’s mental capacity to handle things on their own. It can happen to anyone. When these situations do happen, reporting to the police department and credit card companies can help set up a safety blanket. Not only will these agencies take care of the issue, they will take more notice of unusual activities in the future.
As a caregiver or family member witnessing an older adult experience fraud, it is also important to know how to approach these conversations. This means being gentle and nonjudgmental and asking probing questions in a non-threatening way. There are also attorneys and elder abuse hotlines that can help guide these conversations. Kay also reminds us that everyone has the right to make decisions, even if they seem foolish.
Money is often a difficult topic to talk about; however, our panelists encouraged us to have these conversations in order to reach the fullest potential of our finances. Financial literacy is fundamental to people at all stages of life, and all are encouraged to explore personal financial goals and paths. Learn more from our panelists about financial planning and fraud protection by watching a full video recording of the January Civic Coffee on YouTube.
The January 2023 Civic Coffee was hosted at Lake City Senior Center. We were able to enjoy the company of the Lake City community while having a conversation about financial literacy. The event offered multiple live translations in Spanish, Mandarin, and Cantonese. We encourage you to keep an eye out for our next in-person event to further engage with the community. Visit Age Friendly Seattle’s events webpage, Aging King County’s Age Friendly Live—Virtual Events webpage and/or follow Age Friendly Seattle on Facebook and Twitter.
Contributor Ronya Tan is an intern on the Age Friendly Seattle team, providing community outreach and program support. She is a student at the University of Washington.