One out of five Americans over the age of 65 has been the victim of a financial scam, according to a survey by a nonprofit organization.
More than 7.3 million senior citizens have been taken advantage of financially through inappropriate investments, high fees or fraud, said the survey, which was released today by the Washington-based Investor Protection Trust.
"We now know that a shockingly large number of older Americans are already victims of financial swindles and millions more are in danger of being exploited in such a fashion," Don Blandin, chief executive officer and president of Investor Protection Trust, which promotes investor education, said in a statement.
Forty percent of children who have parents age 65 and older said they are "very" or "somewhat" worried that their parents have already become or will become less able to handle their personal finances over time.
Most American households at or near retirement "are consumed by fear," said Anthony Webb, associate director of research at Boston College's Center for Retirement Research. The average 401(k) account balance as of March 31 was $66,900, according to Boston-based Fidelity Investments, which has 11 million participants. The average monthly Social Security benefit as of April was $1,067.
Almost 40 percent of survey respondents age 65 and over said they've received phone calls or mailers asking for money compared with 19 percent of adult children who said they believe their parents are being pitched what the survey called schemes.
Basic Investment Knowledge
About 45 percent of respondents age 65 and over got at least two out of four questions wrong about basic investment knowledge -- they said that an investment registered with the Securities and Exchange Commission or state securities regulators means it's been reviewed to make sure it's safe and that a very high rate of return is only okay as long as the investment is guaranteed or bonded.
"It is imperative that a serious national campaign be launched to end rampant elder financial exploitation and to protect and help vulnerable older victims," Kathleen Quinn, executive director of the National Adult Protective Services Association, a national nonprofit, based in Springfield, Illinois, said in a statement.
The survey was conducted in May among a sample of 2,022 adults age 18 and over by Infogroup Inc., a provider of market research based in Omaha, Nebraska. The group included 706 adult children with at least one parent age 65 and older and 590 adults who are age 65 and older.
To contact the reporter on this story: Alexis Leondis in New York aleondis@bloomberg.net.
To contact the editor responsible for this story: Rick Levinson at rlevinson2@bloomberg.net.
