"Flashing the cash" makes you vulnerable to theft, and that's especially true of baby boomers with healthy nest eggs.
The Securities and Exchange Commission, or SEC, reported that it had filed a record 146 financial-fraud enforcement actions in 2011 against investment advisers and companies. That's an increase of 35 percent in just three years. The commission anticipates the numbers will rise as more boomers move into retirement and must live off their investments.
What makes people vulnerable is more than just naivety. A report from the Center for Retirement Research at Boston College points out that the ability to make effective financial decisions declines with age as dementia and other types of cognitive impairment increase. One-fifth of people between ages 71 and 79 are impaired, and that rises to half of those between the ages of 80 and 89.
Even if you feel completely competent now, it can't hurt to build some safeguards in your retirement planning, and it might protect you at a point where you can't save yourself. Here are are some things to consider:
- Simplify your accounts. It is easier to keep track of a few rather than many.
- Put limits on the amount anyone, including you, can pull out of your accounts without verification.
- Work with an adviser who is a fiduciary -- someone who is legally required to put your best interests first.
- Don't be shy about sharing financial information with a younger, trusted family member, so that person can help if you seem to need it. Consider putting your money in a trust and naming this person a co-trustee.