Almost half of seniors 65 or older (47 percent) manage their finances—from paying bills to handling investments —entirely on their own. As a result, many seniors leave themselves vulnerable to financial abuse, whether through financial scams perpetrated by strangers or financial exploitation conducted by family or friends.
Other key findings from the AIG Plan for 100 Elder Financial Abuse Survey include:
“We all want to age with grace, maintain independence for as long as possible, and have the freedom to manage our money accordingly,” said Kevin Hogan, Chief Executive Officer, AIG Life & Retirement. “But with 10,000 Americans turning 65 every day, the number of people living with Alzheimer’s and dementia is reaching unprecedented highs—leaving many vulnerable to manipulation and deceit. Longer lives and longer retirements often require a collaborative effort to help seniors protect themselves and ensure their savings can last a lifetime.”
The AIG Plan for 100 Elder Financial Abuse Survey is the latest in an ongoing series of research from AIG Life & Retirement’s Plan for 100, an initiative focused on educating and empowering individuals, employers and financial advisors to help Americans prepare for lives that could exceed 100 years. For seniors and their family members, the possibility of living to 100 will mean having to defend against threats like elder financial abuse.
Popular financial scams not on seniors’ radar
Senior financial abuse is a pervasive and expensive problem—with financial abuse estimated to rob America’s elderly of billions of dollars per year. Further, academic research reveals a jarring juxtaposition: as we age, our confidence in our financial abilities stays constant, while our financial literacy drops off dramatically—showing that even if we feel perfectly capable of going it alone, we may be slowly losing the faculty to continue to make prudent financial decisions.1
One component of elder financial abuse is financial scams, which are typically conducted by strangers catching unsuspecting seniors on the phone or through the internet to manipulate them into sending money. When asked about their knowledge of some of the most common financial scams, a majority of seniors did not have these threats on their radar:
Seniors step up to safeguard their finances
Despite a lack of awareness of common financial scams, Americans—and seniors in particular—seem to recognize the need to protect themselves. The survey found that many are taking some steps to safeguard their personal information and wealth:
With many good habits in place, it’s no surprise that 86 percent of survey respondents 65 or over believe that they have the right protections to prevent senior financial abuse.
“Fear is a powerful motivator. Seniors have adopted valuable defense mechanisms to shield themselves from strangers looking to take their hard-earned savings,” said Michele Kryger, head of AIG’s Elder and Vulnerable Client Care unit, among the first of its kind in the financial services industry. “But when the financial abuser is someone who knows you—a friend, caretaker or even family—then you need an additional line of defense: a financial professional who can help safeguard your interests.”
While in most cases family members look out for their aging loved ones’ best interest, seniors are more likely to be taken advantage of by family than by strangers, according to the National Center on Elder Abuse.2 Still, seniors remain trusting of those dear to them; 81 percent of seniors in the AIG survey don’t believe anyone close to them would take advantage of them financially (compared to 74 percent of all adults).
Advisors help seniors plan ahead
Including an impartial third party can add an extra layer of protection. However, only 16 percent of Americans report they have a financial advisor in place to help manage their finances—and potentially protect against financial abuse. This cohort displayed positive financial behaviors, likely encouraged by their advisor. For example, almost two-thirds of those survey respondents with financial advisors (64 percent) report having a trusted contact in place with their financial advisor, a critical step in helping protect against abuse. A trusted contact is an individual designated by the account holder that a financial institution can contact if they are concerned about the account holder’s mental health or suspect financial abuse may be occurring.
Working with a financial advisor also increase the chances of making smart choices—those who partner with an advisor are more than two times as likely to have a durable power of attorney in place (36 percent vs. 16 percent). Those who work with a financial professional are also getting on the same page as their significant other; 90 percent of adults say they involve their spouse or significant other in conversations with their financial professional.
Reducing instances of senior financial abuse
Seniors and their family, financial advisors, financial services companies and the government all can play a role in thwarting financial abuse.
AIG Elder Financial Abuse Survey Methodology
The AIG Elder Financial Abuse Survey was conducted by Morning Consult from June 20-23, 2019, among a national sample of 2,200 adults. The interviews were conducted online, and the data were weighted to approximate a target sample of adults based on age, race/ethnicity, gender, educational attainment and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.
About AIG Life & Retirement
AIG Life & Retirement, a division of AIG (NYSE: AIG), brings together a broad portfolio of protection, retirement savings, investment and lifetime income solutions to help people achieve financial and retirement security. The business consists of four operating segments – Individual Retirement, AIG Retirement Services, Life Insurance and Institutional Markets – and holds longstanding, leading market positions in many of the markets it serves.
AIG Life & Retirement includes AIG member insurance companies American General Life Insurance Company (Houston, TX), The United States Life Insurance Company in the City of New York, and The Variable Annuity Life Insurance Company (VALIC), Houston, TX as well as their affiliates. Securities products are distributed by AIG Capital Services, Inc., member FINRA. Additional information about AIG Life & Retirement can be found at www.linkedin.com/showcase/aig-life-&-retirement.
About AIG
American International Group, Inc. (AIG) is a leading global insurance organization. Building on 100 years of experience, today AIG member companies provide a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services to customers in more than 80 countries and jurisdictions. These diverse offerings include products and services that help businesses and individuals protect their assets, manage risks and provide for retirement security. AIG common stock is listed on the New York Stock Exchange.
Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIGinsurance www.twitter.com/AIGinsurance | LinkedIn: www.linkedin.com/company/aig. These references with additional information about AIG have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release.
AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries and jurisdictions, and coverage is subject to underwriting requirements and actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.
1 Finke, Howe and Huston, “Old Age and the Decline in Financial Literacy.” Management Science, 2016.
2 National Center on Elder Abuse, “Statistics and Data,” ncea.acl.gov/What-We-Do/Research/Statistics-and-Data.aspx
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