What You Should Know About Retirement Scams

Guest Post by Trisha Miller

Scammers are real. They cost investors around the world millions of dollars. Recently the British government caught three separate scamming companies that lost folks over 10 million British Pounds. The con-artists duped patrons into purchasing some 25% of the supposed value of a rental property. They were then told that the properties would return their investments fully with interest. As far as the police can tell there has been no receipt of payment from any of the scammed retirement hopefuls.

In the US it is estimated over 2.6 billion dollars is lost each year due to scams aimed at seniors and retirees. These individuals will stop at nothing to get their hands on thousands of dollars right out of the pockets of retirees who have worked their entire lives to earn it.

What to Look Out For

As a good rule of thumb, anything that sounds too good to be true probably is. Offering large sums of money and promising large returns is a glaring sign of scamming. Many financial professionals say promising a return more than 12 percent per year is unrealistic. In addition, these scam brokers have gone as far as luring in folks close to retirement by saying they’ll be able to withdraw 9% of their savings each year based on the sheer amount of returns that should be coming in.

If an investment sounds like something you might be interested in, check on the broker before finalizing anything. Do a google search of their name, check out their social media accounts, and business profiles. There are a few tools that will specifically check the reliability of any broker. Namely, the Finra Broker Check should have information on any true investment professional. If someone looks like they have frequently changed firms or may have had action taken against them it’s most likely someone to stay away from no matter how convincing they might be. Remember scammers do this for a living and know how to sell their product to just about anyone.

Scammers have also been known to steal identities. Some folks have reported being contacted by a strange person who claimed to be or know a loved one. These people will ask for large sums of money, frequently directly from a retirement fund, in order bail their loved one out of jail or pay for an expensive surgery. If your “loved one” is calling from a strange number and the circumstances just don’t add up, hang up and contact them at their regular daytime number to double check before making any quick decisions. Call other family members and confirm the story first.

There are many other scams out there that have been running for years. Scammers find a way to keep their schemes going by changing up a few points or making slight modifications to their pitch. Always keep yourself informed about scams Always keep yourself informed about scams that could be potentially devastating to your future.

If You Think You Might Be the Victim Of A Scam

If someone you don’t know has sent you an email correspondence or called and you don’t feel right about it, do not respond. Hang up the phone or ignore the email. Never click on a link unless you are sure of its origin. Beware emails with no subject line as they can be generated by scammers in search of their next victim. If someone comes to your door selling something too good to be true close the door and walk away. It might be necessary to gather their information and report it to their company or the police if the unwanted visits continue. The most important thing is to remain safe and secure.

Scammers can be extremely convincing. If you have already responded to an email or answered some questions over the phone or in person simply end the contact. And if it becomes a serious issue report any information you have to the police.

Lastly, if you find yourself tricked into sharing any personal information such as a bank account number, credit card number, or retirement account number contact your bank immediately and let them know what has happened. They may be able to stop transactions from going through or deny a fraudulent one that has been processed.

Dealing with scammers is a serious issue that should be discussed in every household. Take the time to arm yourself with the knowledge necessary to stay safe. Give yourself and your loved ones the peace of mind knowing you have done all you can to be free of harm and your future protected.

Forced To Retire

Although we would like to think the decision when to retire is up to our individual preference, not everyone has control over when they will transition into their second act. There are forces at work that can impact the arrival date for better or worse. You may have to stick with a job longer than you hoped because you have not yet accumulated sufficient savings to meet the financial requirements of retirement. Instead of winding down a lifelong career and shifting gears to begin your new role doing what you want you may have to stay at the grind a while longer – sometimes a lot longer.

But at least you still have your job. With some extra effort and commitment you can hope to tough it out. There are others who would gladly continue in their current job role, challenging though it may be, but do not have the option. For various reasons they find themselves forced to retire before they would like, ahead of plan, and sometimes before they ready to make the move.

A reader of mine shared her fear of what the future holds when she was forced to retire at age 58 due to her inability to continue with the physical demands of her position. She had been at the same company for more than 30 years but was not ready to retire. She had hoped to put aside additional savings while she had a full time job so she could enjoy the retired life she envisioned. Forced to retire ahead of schedule she was unsure what to do next.

Older employees are often more costly to maintain than their younger counterparts. Health insurance rates for workers over 50 can seem burdensome to small companies. Many who have worked on the same job for decades have risen through the ranks or graduated into higher pay grades. Those higher salary requirements can be reduced by bringing in new people who start at the bottom. Though the skill level may not be there at first, younger employees have the additional attractiveness of likely being with the company for a longer period of time. Sometimes it just seems to make sense to go with someone younger.

Back in 2011 I joined a small start-up made up of twenty gung ho gonna-make-it-happen believers. Everyone was happy to work hard, always holding onto the dream of what could be. We were growing at a nice pace when a bigger company (8000 employees worth) purchased us. As is often the case with acquisitions various parts of our little start-up did not fit in with the corporate structure including my team. So at the age of 53 I found myself back on the streets looking for my next gig in a very difficult economy.

After six months of intense interviewing for numerous positions I came to the disheartening realization I was too old to do what I had been doing successfully for 30 years. Nothing had changed in my skill set – I was just getting older. At almost all of the companies I interviewed upper management was younger than me, many significantly younger. Apparently an “older guy” running a young aggressive sales team was not what they were looking for. I began to seriously wonder if I would ever find another job.

As more months crawled by reality began to sink in – my retirement days were effectively under way. All of our plans for the future included me working until 65 or at the very least 62. If I never worked full time again it would seriously impact our finances. But the writing was on the wall. Like many others shuffled out of the mainstream before their time I found myself among the ranks of the retired well before I planned.

Fortunately in that my wife was able to continue working until her retirement last year. Because of her efforts we had health insurance and were able to add to our savings for five more years. But it would have been nice to have included my contribution as well. And it would have been nice to be the one to decide when I retired. But what is nice is not always reality.

We are lucky. We should be able to get by based on savings and social security and living within our means. Not everyone is so fortunate. More and more workers nearing retirement find themselves out of a job at a time when they can ill afford it. According to Jamie Hopkins, associate director of the New York Life Center for Retirement Income, about 45 percent of people retire earlier than they planned. The best laid plans can dissolve into wishful thinking if you are not given time to sufficiently fund your fun. It is scary but it is a reality many planning to retire are forced to face.