Most of us say to ourselves, “I never would have fallen for the Bernie Madoff Ponzi scheme that bilked billions of dollars from unsuspecting investors.” Yeah right. I suspect many of us would have if we just had enough money to make it worthwhile for Bernie to come after us. So what about the smaller-time bandits who are trying to squeeze the little they can from the less-than-rich? And what about our older parents who seem perfectly ripe for the kinds of con jobs that are going on now?

Scams and financial fraud are ever-present. And as citizens we should be aghast at how many people are affected. What galls me most is how many of these scams play directly to our senior population. Many older people don’t have that built-in suspicion the rest of us have since they grew up in a more innocent time when you could actually leave your door unlocked. And many don’t have the technological savvy to know what they can and cannot do when they get on their computers or cell phones.

A recent survey from the Investor Protection Trust found that over 7 million seniors had been scammed. That’s about 20% of the American population over 65. Scandalous.

The good news is that there is a movement to address this. The Prevent Elder Financial Abuse Call-in Program was created to help our parents avoid being ripped off. Several organizations have sponsored this program and set up telephone hotlines to help. Here are the numbers to call if you have concerns or questions:

  • General finance questions: (888) 227-1776
  • Medical questions: (888) 303-0430
  • Financial abuse: (888) 303-3297
For more information about the call-in program, go to www.investorprotection.org.

But as children of aging parents, there are other things we can and must do to prevent our parents from being victims.

  1. Talk to your parents about these conmen calling or emailing with great opportunities. Warn them and remind them that “if it sounds too good to be true, it IS too good to be true.
  2. Talk to your parents about protecting their online activity. Be sure there are anti virus software programs on their computers and remind them to never give out their credit card info on a link they received in an email. If unsure, they should separately go to the website they are purchasing from, not the link they got in the email.
  3. Be a snoop! I don’t mean pry into their personal files or drawers. But pay attention and ask a lot of questions about what they’re doing on the computer, where they’re investing, how they’re investing, and beg them to tell you about any opportunities they are considering investing in.
We welcome the kinds of programs sponsored by investorprotection.org. And we hope that many more people write about it and talk about fraud and abuse against our seniors so that we can stop these thieves before they strike.

 
We’ve all heard the statistics: the Social Security trust fund will run out of money in the year … (fill in your own blank). And the expenses for Medicare will bankrupt the country at some point (again, fill in your own year).

I’m not a Chicken Little but I do agree there is legitimate concern. And it’s not just that I, myself, am getting pretty close to being a recipient of those government programs. I don’t envy policy makers who are struggling to come up with the best solution. It’s complicated. And I don’t believe it’s selfish of those who want to lower taxes on the wealthiest among us. They honestly believe that by lowering or keeping the taxes low for wealthy people, that will lead to more jobs being created. The argument is that those are the folks who create small businesses and therefore hire people. Hiring people and creating businesses will then grow the economy.

I have two responses to that. One, I ask, “How’s that working for you?” Not so well, eh? The Bush tax cuts have been in place for several years and yet jobs are just not being created are they? Maybe it’s time to start a new tactic and stop pretending that tax savings spur job growth. Tax savings enable wealthier people to spend more (which could help growth) but mostly, save more. That has no effect on the economy.

My second response is based on a report recently that said most job growth does not come from small businesses. This report said that about half of job growth actually comes from large companies. And another portion comes from public service jobs. So the thinking that by lowering taxes for small businesses the economy will grow is wrong. Or at least half wrong.

How does that tie into the tough choices we have to make for Medicare and Social Security? I hope the connection is obvious. Unless we fix those two programs, we won’t be able to grow our economy enough to keep the programs strong and effective. And that will severely hurt what this blog is all about, that is, "caring for your aging parents."

My solution? Twofold.
  1. Raise the upper limit of earnings from which FICA is taken. Right now it’s about $106,000 meaning that every dollar earned after that figure is not taxed for social security. I ask why? Oh yeah, I understand it’s about the formula tying the tax collected to your eventual payout. But that’s artificial. Medicare is not capped at that salary. Social Security should not be either. Based on the numbers I’ve read, raising the salary cap on FICA will solve close to half of the problem.
  2. Raise the age of eligibility for Social Security. It was done with my generation – I can’t qualify for full benefits until I’m 66, as opposed to the 65 it was when the program began – so why not do it again? If we gradually raise the age to 69, we could solve the other half of the problem. Or close.
A lot of policy wonks agree so I hope the legislators accept this thinking. And, by the way, in the spirit of full disclosure, my family would suffer a little from raising the salary cap. I’m willing to accept that loss and it won’t stop me from creating a new job with my small business.