By Matthew M. Glatt, CPA – Founder and CEO of FLP Financial Group, LLC
You have worked very hard – your whole career in fact – to secure a comfortable retirement for yourself, and perhaps a spouse. Many soon-to-be retirees fret over whether or not they will have enough money to carry them through the next 20+ years, and helping to ease those fears is a big part of my job here. One way I accomplish this is by coming up with strategic plans of action and keeping in continual contact with my clients.
However, even the owners of the most robust portfolios with the most vigilant of financial advisors on their team can still be duped out of their hard-earned money.
How? By failing to properly safeguard their retirement savings. Make no mistake, there are scammers out there looking for retirees just like you to take advantage of, but there are also more subtle (but no less insidious) things that could be costing you money unnecessarily.
As part of your periodic personal wealth checkups, your financial advisor should be helping you with the following.
Talking Frankly About Solicitors
Retirees, especially the older folks in late retirement, can be especially susceptible to scammers and solicitors. There are unscrupulous people out there whose entire aim is to bilk retirees out of as much money as possible. And while most people would be savvy enough to avoid writing a check for a door-to-door salesman, you may not be aware of all the ways solicitors are trying to get into your home, and into your bank account.
Beware the “You’ve Won!” Scam
You receive a phone call from a number you don’t recognize, and a cheerful voice on the other end of the line happily informs you that you have won a fabulous prize; usually a vacation of some kind. Unless you specifically entered a contest to win a vacation, this should be a huge red flag. Many of these scams will ask for a payment over the phone to “hold your place,” when in reality they are getting you to hand over either credit card or checking account information. They could run up many charges before you are aware of what happened.
Beware People Pretending to be From Your Bank
Here is a good universal bit of info: a bank will never ask you to provide sensitive information over the phone, or via email. If you are contacted by someone claiming to be from your bank, and they are making vague threats about your accounts, tell them nothing over the phone. Instead, go to your local branch to verify this issue in person. Chances are, there’s nothing wrong with your accounts, and the scammers were trying to intimidate you into parting with sensitive information.
Beware Spam Email Scams
Some email scams are very sophisticated, and can easily trick you into thinking that they are real. Much like banks will never ask you for sensitive info via email, online retailers or marketplaces won’t either. Keep an eye out for URLs that are slightly off. For example: “Ebay” vs. “EEbay.”
If you are being harassed in person, you are perfectly within your rights to alert local authorities. If you are being harassed online, you can easily report suspected scams, and block the senders. If you wind up in a situation where you fear you may have been scammed, contact your bank and financial advisor right away so they can take action before the scammers do.
Go Over Your Credit Reports Annually
Having a good credit score is essential for many reasons. It shows that you have been responsible with payments, and are therefore eligible for low risk loans, and other forms of credit. However, checking your credit score can be a bit of a hassle, to the point where many people choose to simply forgo the whole process.
Your financial advisor should be able to not only prepare an annual credit report for you, but to explain it as well. Ideally, your credit report will not contain any surprises. If it does, it will need to be addressed right away. This is why it’s recommended that you check at least once a year. You don’t want anything affecting your credit that shouldn’t be.
Review Your Bank Statements
Your bank will typically send you a monthly statement detailing all of the activity on your various accounts. It is very important that retirees go over their bank accounts carefully, because this may be how you spot any suspicious or unauthorized activity. If there are unknown charges or debits to your accounts, it is best that you bring them up right away so that they can be addressed.
Of course, is also a good idea to keep on top of your accounts so that you have a good understanding of any fees you are paying. Some retirees have no idea how much money they are paying in account maintenance fees, commissions, stock trades, and interest. When going over your accounts with your financial advisor, they should be completely transparent with you. If they are not, that’s a problem that may be costing you money.
Check Your Charitable Donations
Another place where retirees can get confused is the difference between a one time charitable donation, and a recurring payment. Let’s assume you wanted to make a generous gift of $1000 to a charity you support, and you sign up to do this either via mail, or through their online giving platform. It is very important that you look to make sure you are not committing to a recurring donation.
This is where checking your account statements comes back around. If you were under the impression that you were offering a one-time gift, but see that you were charged a second time the following month, it’s important that you catch this activity right away. If you don’t check your accounts frequently, and this recurring went on for a year, you wind up having given $12,000 when it’s all said and done. That’s quite a difference!
If You Suspect Your Assets in Retirement Aren’t Properly Safeguarded
First and foremost, gather all the relevant information you can: account statements, investing information, and a list of all your assets and expenses. Because there is so much to unpack there, it’s vitally important that you work with a trusted financial advisor who can look at your financial situation, and immediately address any weak points.
Your assets in retirement are meant to carry you through many years, so safeguarding that money should be a big priority to both you and your financial advisor. For a more complete explanation of how your financial advisor ought to be protecting your assets in retirement, download our free guide called “Living in Retirement.”
