Defending Yourself Against Financial Mistakes and Fraud

Jun 06 2017

Defending Yourself Against Financial Mistakes and Fraud

Wealth accumulates as we age. But financial judgment is one of the first areas of cognitive ability to decline. As we age, we are more likely to make financial mistakes and become victims of financial fraud. Numerous studies find that those suffering cognitive decline think they are more capable of financial management than they really are.

So how do you protect yourself? Begin your defense as soon as possible, keep your family informed and don’t procrastinate!

Here are a few simple ideas to get your started.

  1. Get that annual checkup—a financial checkup! Figure out who will manage your affairs if you cannot do so. Make it legal and make it known. Revisit these decisions annually.
  2. Clean out your closets—your financial closets! Simplify and consolidate so a trusted advisor can easily find and manage your assets.
  3. KISS You (Keep It Simple Smart You!) Shift to less active investments and set up automatic retirement drawdowns.
  4. Financial advisor equals fiduciary! Make sure your financial advisor is legally required to put your best interest first.
  5. Make your spouse your partner! If the spouse managing the finances dies first, the survivor needs to learn to do this at a time when the ability to learn new things may have declined or cognitive impairment has begun. Share responsibility now so the survivor is less likely to become a victim of financial fraud.