When the COVID-19 pandemic began in March, no one could not have imagined senior financial isolation would be one its side effects. But that is exactly what life insurance company, AIG, warns is happening.
Older adults are at risk for severe illness from COVID-19, so the CDC urged anyone aged 65 years and older to limit interactions with other people as much as possible. Adult children and grandchildren avoided loved ones for fear of infecting them. Nursing homes and assisted living communities across the country closed their doors to visitors. While these precautions are necessary, it exacerbates the already prevalent issue of senior social isolation.
Senior Financial Isolation
In addition to the emotional impact, social isolation worsens financial abuse among older Americans and is estimated to cost billions of dollars a year. Emerging evidence indicates prevention could save lives and prevent illness, injury, and suffering, while also yielding major cost savings. One in ten financial abuse victims will turn to Medicaid as a direct result of their own money being stolen from them, creating a public health crisis. “Financial exploitation causes large economic losses for businesses, families, elders and government programs, and increases reliance on federal health care programs such as Medicaid,” warned a 2014 elder justice report.
Advice to Seniors
AIG explains that senior financial isolation can be damaging but implementing a set of checks and balances before an issue arises can prevent financial exploitation.
Appoint a trusted advocate: Research shows that many Americans face cognitive decline as they age. This can lead to out-of-character financial decision making, from forgetting to pay utility bills to falling victim to fraud. We all want to maintain our independence as long as we can, but simple precautions, such as naming a trusted contact and putting into place joint Powers of Attorney can help safeguard senior assets and preserve retirement income. The key is to take these steps before an issue arises.
Involve loved ones to spot vulnerabilities: Elder financial abuse is a pervasive and expensive problem estimated to rob America’s elderly of billions per year. By virtually visiting with loved ones and staying engaged in their lives (albeit at a distance), family members are often able to recognize warning signs of vulnerability, such as withdrawal or forgetfulness. They may also be able to assist with reconciling account statements and finding local resources. Loved ones can also help keep seniors informed about prevalent scams, such as COVID-19-related scams offering fraudulent tests and cures or soliciting donations. Educating seniors about these scams is especially important in this climate, since when we’re feeling lonely or scared, we’re more likely to stay on the phone with a stranger or click on a link touting a treatment.
Engage a financial professional to help prevent exploitation: Sadly, seniors are most likely to be taken advantage of by those they know. A financial professional can serve as a final line of defense in catching these instances of financial exploitation. Advisors can notice uncharacteristic financial behavior in their clients, and help to flag, investigate and prevent suspected financial coercion and manipulation from family, friends or caregivers. This is one of many reasons it is critical that advisors pick up the phone to call their older clients during this challenging time. Recent research conducted by MIT AgeLab sponsored by AIG Life & Retirement found that just 24% of Americans ages 61-75 had discussed COVID-19 with their financial advisor.
Got Medicare Questions?
We hope this information on senior financial isolation is helpful to you.
If you have questions about your Medicare coverage, call Empower Brokerage today. Let us help with your Medicare questions so you can get back to the activities you enjoy the most. (888) 446-9157 or click here to get an INSTANT QUOTE
See our other websites: