July 25, 2016 – As we age, our banking and financial needs change. As a young or middle-aged person, our priorities may be saving for a large purchase like a car or a home, building up an emergency fund, and saving for retirement. But later in life, the priority often becomes making retirement savings last rather than earning and saving for the future.
In addition to different money goals, older people are more susceptible to financial abuse and scams; an outcome that financial institutions can help protect against. With that in mind, many financial institutions have created initiatives or programs aimed at helping older people with the unique banking challenges they face. Both AARP and the Consumer Financial Protection Bureau have released guidance for financial institutions on how to protect and make their older customers more comfortable. CFPB recommends training staff to detect warning signs of financial abuse and reporting all cases of suspected exploitation. AARP suggests making the banking environment easy to access (seated areas to speak with employees or for waiting) and empowering financial caregivers by keeping them informed of financial updates, for example, through a texting alert system that notifies them if a withdrawal is made from the older person’s account.
Putting these measures in place isn’t just a gesture of good will. A survey found that doing so is also beneficial for business. Banks reportedly lose $1 billion annually from exploitation and four out of five older adults prefer to bank at a financial institution that proactively fights exploitation. Furthermore, about one in four are willing to pay more for those benefits, like employees who are trained to spot exploitation.
As you are nearing retirement and older age, it is worthwhile to look into whether your bank is aware of the needs of its older customers. If that information is not easily available, speak to a bank representative about your concerns.
The source of many financial challenges for older people is cognitive decline. Beyond seeking out a financial institution that is proactively putting measures in place to help prevent financial exploitation, there are things that you personally can do to safeguard your money against the vulnerability that aging may cause. Actively talk to your spouse, partner or a trusted loved one about your financial plans and goals, which can help them take notice if things veer off course. Get your financial documents in order; make sure you have all your account documents, account numbers and passwords in a safe but easy-to-access place. Also make sure all of your documents, like your power of attorney and will, are up to date.
Banking in your later years presents a unique set of challenges and concerns. It is important to plan now for a time when you might be more vulnerable to financial exploitation, and your bank should be there to support and help you. Learn more about financial elder abuse by reading WISER’s fact sheets on the topic.