Financial fraud and the elderly
As Americans age, we can count on two things: more Americans will become cognitively impaired, and losses from financial fraud will increase.
According to a new report from the Federal Trade Commission, the average loss due to financial fraud for people over the age of 80 is the highest of all losses due to financial fraud of any other age group. The median fraud for those over 80 is $ 1,300 and the incidence of fraud is 18%. Younger people report much higher incidences of financial fraud, 44% of 20-29 year olds report financial fraud, and their median loss is $ 324. The FTC reports financial fraud by age but does not focus on the losses of the elderly.
REVIEWING THE UNSAFE PENSION SYSTEM MARRIAGE AND COGNITIVE DECLINE
In January 2017, researchers at the Dr. Alicia Munnell Center for Retirement Research at Boston College, Anek Belbase and Geoffrey T. Sanzenbacher wrote a series of memoirs that did not get enough attention.
The Center for Retirement Research has found an uncomfortable increase in the incidence of cognitive decline and the ability to manage money. They pointed out an irony, many Americans rightly worry about not having enough LINK retirement money, but one other thing they don’t worry enough about. They should be concerned about having money and having the ability to manage that money. And improving financial management capacity through financial education is very complicated. Financial education likely won’t help seniors succeed The American Way to Save for Retirement which forces people to have and manage huge sums of money at the age when they are least able.
Most people with normal cognitive aging can manage their money until they are 80; but most people with cognitive disabilities – measured conservatively at around 40% of this population – will need help managing their money to prevent fraud or abuse. Evaluating the potential return of an investment against its risk and cost and discerning information from the sympathetic man on the phone worried about your Amazon account requires a very savvy person.
Medical researchers get it or got it once. The Journal of American Medicine (JAMA) published studies on cognitive impairment and money management in 2011. But researchers – perhaps in academia and government – need to link money management and brain health and make this research a priority.
IMPACT OF COGNITIVE DECLINE AND FINANCIAL FRAUD
As the population ages, more and more people will be in their high-risk years of cognitive decline. According to the Alzheimer’s Association, the oldest baby boom generation (Americans born between 1946 and 1964) reach the age of 75 in 2021 and 11% of people aged 65 and over have the disease. Alzheimer’s. The risk of cognitive decline increases with age. Almost 14% of people aged 75 to 84 and 35% of people aged 85 and over have Alzheimer’s disease. And pre-cognitive decline is underreported, which is frightening because older people with subclinical cognitive impairment have eroded financial judgment, putting people at risk for fraud, according to Rush Medical’s Professor Patricia Boyle. Middle School. She found the startling result that poor financial decisions help predict cognitive dementia. This means that people are wasting their finances before anyone knows they need help.
Boyle spoke at a lively three-hour closed-door workshop titled “The Challenges of the Retirement Landscape” at the Michael Milken Institute on May 19, 2020, professors and other researchers discussed inequalities, insufficient and excessive risks faced by American seniors.
GOOD BAD NEWS – MOST OLDERS CANNOT BE DEFRAUD BECAUSE THEY HAVE NO MONEY
The system is broken by ignoring people’s diminishing ability to protect their money as they age and that does not help people accumulate enough money. The money people have – especially at the low end – is not enough, but it is protected because it is social security. My testimony to the U.S. Banking Committee in March, chaired by Sen. Sherrod Brown (D, Ohio), reported that half of near-retirement households (with members aged 52 or older) in the bottom half of the distribution of wealth have less than $ 296,000 in total. median wealth, including the value of their pensions and social security benefits. The median wealth of the middle class – the next 40% of the wealth distribution – is $ 1.02 million. The households of the richest 10% have a median net wealth of more than $ 3.2 million. One of the positive aspects of this news is that most people do not have significant retirement wealth and Social Security is the most important source of household wealth for retirees, it is mostly immune to it. of financial fraud.
WHAT WE NEED FOR HEALTHY RETIREMENTS
Terry Fulmer, RN, PhD, Chairman of the John A. Hartford Foundation, co-authored a compelling and comprehensive 2020 article calling for a ‘Towards a Global Seniors Friendly Ecosystem’ It helped me articulate – a retreat to do itself is not a friendly ecosystem for American seniors who increasingly face cognitive decline. We need more secure pensions and reliable management. We need more research on financial security and well-being.
Economist Kevin Hassett and I have a modest proposal for a smarter pension accumulation and management system in an article with the Economic Innovation Group. And, financial advisor superstar Ric Edelman has a similar plan that reduces the role of pretending that workers can accumulate enough and manage their retirement assets safely. We need a retirement system for the people we have, not for those who one day may become superstar financial assistants and savers.