Make It Last – Ep 110 – Gift Card Scammers, Age’s Impact on Financial Literacy, & Nursing Home Expenses

July 10, 2019

On average, after age 60, financial literacy decreases by 1.5% per year. In today’s episode, Victor discusses how to handle this idea moving forward in financial planning. Victor also talks through scammers using gift cards to finance fraud as well as the rise of nursing home expenses.

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Make It Last with Victor Medina is hosted by Victor J. Medina, an estate planning and Certified Elder Law Attorney (CELA) and Certified Financial Planner professional (CFP). Through his law firm and independent registered investment advisory company, Victor provides 360º Wealth Protection Strategies for individuals in or nearing retirement.

For more information, visit Medina Law Group or Palante Wealth

Click below for full transcript

Announcer:  Welcome to “Make It Last,” helping you keep your legal ducks in a row and your nest egg secure, with your host, Victor Medina, an estate planning and elder law attorney, and certified financial planner.

Victor J. Medina:  Everybody, welcome back to Make It Last. I’m your host, Victor Medina. I’m glad you can join us for another exciting adventure in the world of legal and financial retirement planning.

We have to start out today with a bit of an apology. We ended up keeping last week’s show ahead of time. We made a reference to what was going to be going on for the Fourth of July.

It turns out not only did we not broadcast that show live in the week that it was supposed to be, but we got preempted by the Somerset Patriots. There was absolutely no real reference to what was going on on the Fourth of July whatsoever.

What can I say? I was found out. We recorded this ahead of time and it turns out that baseball became more important for what [laughs] we were doing.

In any event, I hope you all had a fantastic Fourth of July weekend. I had a great one. I had the opportunity to close the office for the fourth and the fifth. Everyone in my office got to have a nice, long weekend. I got to spend the time with family making hamburgers by hand, grilling them.

Of course, it’s the weekend in the summer. We have to go out and do some yardwork. I trimmed some hedges and what not. In any event, it was a fantastic weekend, really. I got the chance to be with family and the ones that I love. I hope you had an opportunity to do that as well.

I’ve got a little bit of a potpourri of topics to go over with you today. A lot of them are relevant for what happens as you get older and a lot of the decision‑making that comes with that, some of the risks that come with that as well.

I do want to talk to you a little bit about these topics. We’re going to talk about how the financial decision‑making skill goes down over time. I want to talk to you about nursing home expenses continuing to rise.

I want to talk you about how scammers use gift cards to steal your money, and all of these topics that I came across more recently as I was reviewing the news. I thought that it was important to share that with you.

The first one that I did want to cover is the surprising reality of financial decision‑making as we age, a form of tracking our ability to make decisions over time. Here’s the thing. One of the least discussed risks associated with retirement in general is the issue of cognitive decline as we age and, specifically, how it impacts your financial decision‑making.

Most of you are already aware about the incredible incident of Alzheimer’s in cognitive‑related disease that’s out there, whether it’s dementia, dementia‑related. It is that biggest thing, lots of statistics being bandied about, about how quickly it’s going to increase over time, how many cases there will be, whether it marks the year 2040 or later.

The idea, generally, is that we could be facing quite an epidemic of people who are healthy but suffering through cognitive decline and their ability to care for one another.

That’s not even the topic that I mean to cover here. That’s one form of a disease state that is something that if people can start to see. There are some obvious ramifications to be going through that. If people starts to wander, they become a wander risk. If they are extremely forgetful, if their short‑term memory is lost, we can start to see that as the impact of something that may be a dementia‑related disease.

There’s this other component of it. That is the ability to make decisions. Listen, I can feel it even today. When I try to set my schedule up for the week, the day, I happen to know that I am much better making decisions early in the morning than I am making decisions in the afternoon.

There has been tons of research to support this, that essentially, decision‑making is a resource that you have that is finite. Your ability to make great decisions is definitely better when you’re fresh than when you’re tired.

I saw an example of this a couple of weekends ago. My middle son is a soccer player, and quite a good soccer player. Don’t ask me where he gets his physical skills from because he is already a size 11 and a half shoe and he’s 12 years old.

He’s going to grow to be enormous. I am not. I’m decidedly shorter than average. He’s going to be really tall. He’s a fantastic soccer player and developing to quite a good defender. He’s got a great body to be a defender.

In any event, we were at a tournament in Hershey, Pennsylvania. There were a couple of things that were happening in this tournament. The first thing is that we were always on the same field. No matter whether we played early in the morning or in the afternoon, they had us on the same field. They tried to just keep all of the kids of the same age together.

He’s at an age where he could play in a really big field. He does. He plays in a really big field. They kept all of the kids who were born in the 2006 range, whether they were boys or girls, whether they were of a high flight or a lower flight. Whatever it was, they kept them all essentially at the same field.

Which means that we got to see the same refereeing crew basically throughout the day. There was no rest for them. Sometimes they are sent out. If you aren’t familiar with soccer, you know there’s generally three people on the field officiating.

There’s a person in the middle that’s the head referee. Then you have two assistant referees or ARs that are on either side of the field, calling different plays that are going out there in fractions and whatnot.

In a really great setup in the tournament, you might see maybe a crew of four or five, where three are on the field at any particular time, and one or two are rotating off and resting. That didn’t happen in this case, even though this is a really huge Memorial Day tournament, there was only three. We had games in the morning and in the afternoon.

Because we really didn’t have any reason to go anywhere in between, I basically stayed throughout. I watched all of the games. My kid is out playing with his friends but I got to watch a lot of the games in between.

What I noticed is that the referees were making better decisions, objectively better decisions. See, because my kid wasn’t playing in the games that I was observing. It wasn’t like I was biased about the calls that were coming in there.

They were making objectively better decisions in the morning than they were in the afternoon. It’s as though their capacity to make great decisions had just been used up, through no fault of their own.

I’m certain that they weren’t trying to miss calls or favor one team over the other. I take them as being really good objective referees, doing what they needed to do. In this case, it was clear that they were using up whatever resource they had, the reserves to make great decisions, and it happens over time. That was something that was very visible.

Here were people that were being asked to make judgment calls and decisions about what to call intent, whether or not people were playing with an advantage or not over the course of well over 12 hours, or so.

We started at seven o’clock in the morning. We were done by seven o’clock in the evening. There was a lot of decision making to be made. They barely had time for lunch.

As I said before, I find the same thing happens in my own professional life, that I’m better in making decisions, really good, strategic decisions early in the morning. It’s one of the reasons why I try to get in here before the rest of the team gets in, to think about the more important things that my business needs decided or acted upon.

The same thing happens as you get older, and particularly with the case of personal finances. Research is showing that the decline is actually quite predictable. It is susceptible to numbers and a rate of decline that follows along a curve that we can predict.

Predictable to the point, by the way, that we know, on average, after age 60, financial literacy decreases by one and a half percent per year. What they’re doing is they are applying a test of financial literacy. There’s a score of that. What they find is that they looked at people, by the way, that were age 24 to 94 in this.

You peek at age 49 ‑‑ this is the top of that ‑‑ then decline from there. What’s interesting about that test or the research that they’re doing is despite an obvious, measurable decline in financial literacy, the confidence that’s associated with financial decision making doesn’t decline at all.

In fact, there is a very slow rise on their confidence over time. If we’ve just looked at people from age 60 to age 90, what we find, as I said before is their financial literacy is declining by 1.5 percent per year, but their confidence is pretty constant in the first 10 years, and then increases after that.

The decline in financial literacy, coupled with a continued confidence, can lead to pretty poor financial decisions. Meaning, if you were aware that your financial decision‑making capacity was going down, and it was going down, you might be able to make some accommodations around that.

When you believe that your financial literacy is as strong in that moment as it ever was, when in fact it’s less than that, well then we can get some pretty poor results. We can have things like an increased susceptibility to scams and to fraud. We know this to be the case.

Look at the news out there, and recognize how many pieces there are about people scamming the elderly. Why? Are the elderly more trusting? Is there something about that population? It can be a combination of the idea that their ability to make decisions has gone down even though their confidence about making the decisions has remained the same.

It goes beyond just susceptibility to scams and attack. You could have very routine things happen along the way. You could be missing credit card or mortgage payments in a way that you never had before.

Then, of course, there are some more insidious things, whether it’s making donations to organizations that you’d normally would stay away from, especially if you had your wits about you and recognized that they weren’t as good in their mission as they said that they were.

We could have forms of elder abuse, where children or other people that you’re trusting are taking advantage of you, financially. The key here is to be prepared for this eventuality. It is a predictable result that you will be there. It is also a predictable result that your confidence won’t go down over that period of time.

I want to share a few ideas that you might want to consider to establish a better overall strategy to deal with this decline. The first thing is have a conversation with your children. Bring them into the loop. Let them know what actions you are taking to prepare for this decline.

Most children are wary of having this conversation with their parents because they don’t want to offend them because it could be perceived as insulting. The dynamic between the two of you is one where they’ve always given you a measure of respect and deference. Even if they didn’t agree with your decision, you likely raised them to respect their elders.

They’re not necessarily going to challenge you on that, especially if they love you. Until it gets really bad, they’re not going to be in a position where they’re going to be offering, “Hey, we ought to have a conversation about your impending financial literacy decline, and by the way, pass the croissants.”

If they’re not going to bring it up, you have to bring it up. You have to offer them a guide to your thoughts on the topic and how they, as your trusted children can navigate that conversation down the road. What permission are you going to give them to enter into that conversation? How are they going to feel comfortable that that permission exists all the way through?

You’re going to want to talk about some strategies around that. That there may be some key phrases that they can use to enter into that conversation. You may want them to begin a conversation in a particular way so that you can recognize that it’s coming from the place where they are concerned about. Wary around your ability to make decisions, and why it’s being impacted.

The next strategy you might want to consider is writing a letter to yourself. In here, you’re going to want to consider the tell‑tale signs that it might be time to delegate some of this financial decision‑making. You might want to write a letter to yourself reminding you that you have children who love you and people who care about you that want nothing in the world but the best for you.

Give this letter to the person most likely to help you with your finances now so that when the time comes, they’re prepared. Back to the that first recommendation, ensure that your children are on the same page, or at least the majority of them, in the belief that it may be time to present the letter back to you. This can be key or cue that it’s time to hand over the reins.

If you have a conversation with yourself, it might smooth over the hard feelings or the natural resistance that you’ll come up with when you are facing that decision in the future. Remember, your confidence level is going to stay super high on this, and so you want the opportunity to overcome that fatal flaw.

Where I work, in terms of being an estate planning, specifically an elder law attorney, we make it a requirement of part of our planning that people nominate somebody as a power of attorney or as a successor trustee to help them with your financial decision‑making beyond their spouse, if they’re married. We recognize that people are going to get older.

If they only trust their spouse and nobody beyond that, I can tell you from experience that they’re going to be set up for a particular failure in the future. Meaning that they will run out of one or both of the spouses as options, and they’re going to have to rely on somebody else.

A good comprehensive plan will cover this designation of a trusted person in those roles. Whether we’re talking about a power of attorney, a trust document, healthcare directive really doesn’t matter. All of the documents are important.

However, we need to get a backup in there so that if you fly by that decision‑making limbo, where you are not great at making decisions but you’re still capable of making them, that we have some backup so that there’s no failure point in your planning. That is really important.

Not only are you susceptible to the scams and the poor decision‑making on your own as you get older, but the consequences of not having great estate planning documents means that you could get to a point in time where you are incapable of making your decisions.

If you don’t have any documents that help somebody else make those decisions with you and for you, then you can be forced to go through a guardianship proceeding, which is a legal proceeding that costs a lot of money, takes a good amount of time, and completely avoidable with great estate planning documents.

The idea is that you don’t want to stick your head in the sand about the need for this over time. You don’t need a terrible event like an Alzheimer’s scenario in order to benefit from having great estate planning in place, to having your legal ducks in a row.

Your normal decline in ability to make financial decisions could be the reason why you have these estate planning documents in place so that as we get the predictable decline over time.

When you go over that fail‑safe point where it’s just not possible to make decisions any longer, then you have the documentation that empowers somebody and not just the spouse, but somebody at the next generation to help you make decisions on their own.

As I mentioned, you’re going to decline at some point in your life. The research is clear about that. It is simply an unfortunate fact of life.

[background music]

Victor:  Making the transition to having somebody help you with your finances doesn’t have to be a painful experience.

You can set some conditions up where you can be successful, like writing yourself a letter, putting your state planning documents in place, and having proactive conversations with your family members to make sure they’re aware about what your wishes are and what the conditions are you are going to need help. You’re going to be really glad that you did. I promise you.

We’re going to take a quick break and we’ll come back. We will continue with “Make It Last.”

Announcer:  Life is better when you have your legal ducks in a row. One area attorney can help you get your financial ducks in a row as well. Victor J. Medina fills dual fiduciary roles, an estate planning and certified elder law attorney and also a credentialed certified financial planner professional.

Through his law practice and independent registered investment advisory company, Mr. Medina serves high wealth individuals seeking conservative advice and a professionally managed approach to retirement wealth management.

Learn more about Victor’s 360 Degree Wealth Protection Strategies, call 609‑818‑0068. That’s 609‑818‑0068 or listen to the newest episode of Make It Last Radio, Wednesday mornings at 11:00 on 1450 talk radio.

Investment advisory services offered through Palante Wealth Advisers, LLC, a New Jersey and Pennsylvania registered investment adviser.

[background music]

Victor:  Hey, everybody. Welcome back to Make It Last. We’re going through these potpourri of topics that I want to cover with you today. It will change your pace from what we normally do, which is take one topic and go really deep on it.

We spent the first segment talking about the decline of financial decision making over time. One of the things that I mentioned is that it makes you susceptible to scams and fraud. I came across an article in AARP that highlighted one of the ways that gift cards are being used to finance fraud.

They make them an easy choice for scammers. This was on, as I mentioned, the AARP website, which is obviously for retired persons. Let me give you the background. There was a woman who entered a Kroger’s, which is a grocery store in Virginia, back in February. She was a school teacher.

She was on her cell phone talking to a man who had identified himself as an officer from the IRS. That gentleman has explained in some threatening and nasty terms that she owed $5,200 in back taxes and that she would be arrested if she didn’t pay it off.

Now, thankfully, fortunately, an arrangement between Google, IRS, and her local police department, she could make a down payment on her debt and avoid jail, so says the person. All she had to do was buy two $500 Google Play cards, gift cards, read their code numbers to him over the phone.

She’s in her 50s, by the way, just her 50s. She walks into the grocery store, and she tries to buy the cards by check. The clerk at the store gets suspicious. Do you know where these are going? How are they going to be used? After a pause, she kind of nods, yes.

The clerk says, “OK, good, you know, because we got a lot of stamps.” They’re using these Google prepaid cards for them. She covers the phone so the person on the phone can’t hear her and she says, “Please help me.” She and the clerk go to the store manager, explain that she was being scammed, had her hang up, and the effort to separate this woman from her money was over.

You can think of a gift card as the perfect birthday or graduation present for a relative who’d like to buy music, video games, clothing, or food at a restaurant. As the ordeal for this 50‑year‑old school teacher illustrates, gift cards have also become a popular payment mechanism among scam artists.

Whether or not someone is masquerading as the officer from the IRS about to arrest you or tech support, which they do a lot, or attorney for a grandchild who’s supposedly in jail, criminals pressure their targets to buy these gift cards for Apple iTunes, Google Play, Best Buy, or other popular retailers.

Order them to provide the code numbers and PIN numbers on the back of the card so they can be redeemed. It is a growing trend. The FTC, which stands for the Federal Trade Commission, has data that shows that 26 percent of scammers ask for gift cards and reload cards back in 2018, just last year, versus 7 percent in 2015. In three years, it had nearly quadrupled in the rate.

Here’s some good news. As awareness of gift cards in scams grows, so do the efforts to head off these scams. There are employee training programs. This was something that had happened at Kroger’s, for example. Their service desk personnel are trained to engage with customers to ensure that they’re not being scammed.

That’s how this 50‑year‑old school teacher was able to be saved because that clerk had undergone that training. By the way, they are entitled to refuse the transaction, if necessary. This is, according to Kroger’s and the way that they’re being trained.

Apple, Best Buy, Target, all say that they train employees to be on the lookout for people who might be buying gift cards in the midst of being defrauded.

A quote from the general counselor from Best Buy, who’s also their chief risk and compliance officer says, “What we wanted to be able to do is have people recognize if they saw somebody in distress.”

There are other measures that are being introduced, including limits on the purchase and use of gift cards. Last year, three major retailers ‑‑ Best Buy, Target, and Walmart ‑‑ announced that they were voluntarily implementing two measures to reduce gift card fraud.

One was to lower the maximum amount of money that people could load onto gift cards in one transaction. Their idea there was if they could limit that, in terms of only let’s say $100 in one transaction, it would at least reduce the magnitude of the scam or the fraud.

Unlike the two $500 gift cards that the scammer representing the IRS was at the beginning of the story here would have only been limited to $100 if she was able to buy two $200 instead of $1,000.

The other measure that they’re implementing to reduce gift card fraud is to put new restrictions on using gift cards to buy other cards which is a practice that scammers are using to hide their tracks, a little bit of a shell game. If they use one set of gift cards to buy another gift card. Then use those gift cards to buy something else.

By the end, when you start to unravel it, you never knew what money was being spent on if you could find it at all.

AARP collaborated with Best Buy and the National Association of Attorneys General, which are the state law enforcement officers in each of the various states to create a public service announcement warning people about gift card schemes and scams.

One of the key messages in that is gift cards are not used and cannot be used to pay bail, taxes, or court fines. Those are topics, that are these hot button topics meant to essentially engage your emotional concern for another human being. That can overwhelm your rational thinking basis, but, in fact, you can’t. You can’t at all.

By the way, the followed up with the woman who was attempting to be scammed. She said that she was extremely thankful about the help that she received at the Kroger’s. She ended up thanking the store manager, the clerk, everyone that was involved.

Back in the parking lot, when she was sitting in the car, she got another phone call. It was the officer [laughs] from the IRS, and he was angry. She ended up yelling at him, “Don’t you call me again.” Without any prompting or any help, she hung up on him, and got rid of that.

There are a few other things that people can be doing to help themselves save money. I came across a fantastic article in “The Wall Street Journal,” in the tax section. One of the things that they were talking about was unnecessary monthly subscriptions. The truth is that everything is moving to this model.

Everything is moving towards models where people pay on a monthly basis. When we do shows talking about setting budgeting, I probably have been guilty of not spending enough time with you, coaching you through examining whether or not the monthly bills that you’re paying, the monthly subscription plans, are worth it or not, or it belong in your budget.

It’s too easy to just accept to the budget the way that it is, and then build your income around it. It takes more work to unwind that, to see whether or not we should be, with as many monthly subscriptions as we have. If you’re unfamiliar as to why everything is moving to this model, it’s pretty easy to figure out.

Back in the day, people used to simply pay money for an item. That would mean that they bought it once, they owned it, there was a life cycle on it. They had to make a bigger financial decision to purchase something on a lump sum basis. The company always had to be coming out with new products and new configurations in order to make money.

They were always selling as a one off. With the Internet of Things and service being a bigger benefit than something that is tangible and hardware, companies are moving to these subscription models in large parts to help streamline or smooth out their cash flow.

If they can get a bunch of people paying a subscription instead of paying something on a one‑time basis, they can make really predictable models about how they’re going to grow and what kind of revenue they’re going to get. It makes it easier for them to secure financing, gets a stronger business model for them.

Overall, these things become sticky over time. In the article, quite amusingly, the author, who’s a tech journalist, tech columnist, that I’ve been reading for awhile, she says that she was paying $15 a month for an electronics fax service that she used twice.

She’d been paying it for three years. She paid $540. She could have bought 10 fax machines, or a plane ticket to Ireland to visit the museum where the world’s first fax machine is on display.

Everything in the subscription economy business, every business, is moving towards billing you monthly or yearly. There are subscriptions for everything, the shirt you’re wearing, hardware, everything is in there. You may have noticed, at some point in time, where iPhones went from being $ 600 or $800 to being available for $40 a month.

Essentially, for the rest of your life, they’ll give you a new one every year. This is all part of this subscription economy off of it. There are some services to help you with this as you start to examine whether or not you should be paying all the things that you are.

There are some ways to help you with this. They include some apps, which I’m not sure if they’re actually on subscription or not. I’d be hilarious. Imagine if they are. There are things that you can do. There are some services that help you.

There’s a service called Truebill, another one called Trim, and another one called Bobby. Truebill is a pretty good one, and so is Trim. They essentially burrow into your personal finance accounts and find these recurring charges. You give them access to that. Whereas, Bobby is one that you input your subscriptions and monthly fees into manually.

There are a couple of steps that you can do if you’d want to access this and address it. One is to do an audit. Log into your credit cards and your bank accounts, and make a list or a spreadsheet of all of your monthly and yearly subscriptions along with their charges.

As I mentioned, there’s an app called Bobby. It’s available for iOS, which is your iPhone. It allows you to make a simple list and tally up the totals. This next step is you may want to consolidate to family plan. You want your partner, spouse, or otherwise to do the same, and cross‑reference the list.

You may spot some duplicates in your household. You could get some savings that way. Obviously, we want to be able to cancel. Mark down the subscriptions that you really don’t find any value in anymore, or worse, things that started off as free trials that turned into small recurring monthly charges. Say goodbye to them.

Right now, you’re dying a death by a thousand cuts. More often than not, the Cancel my Subscription button is hidden in a menu item, or you have to call and question what you’ve done in your life to deserve 30 minutes of hold music in order to address all of these.

There is a new law in 2018 in California, which requires businesses to provide a way to cancel subscriptions online. That has certainly helped. If not, you can try the company’s customer chat service, or send an email. Those are ways of doing it.

Whereas, a good benefit, and it could be something that you were avoiding trying, there could be a good benefit to you having your subscriptions through the Apple platform.

Apple iTunes gives you a fantastic way of managing and subscribing to all kinds of services. All the way up through, including things like Netflix, which is a movie subscription base that is not localized to your Apple account. You can pay for it that way.

If you subscribe through the Apple system, they will actually provide for you a very easy way of canceling your subscriptions on your iPhone. You go to Settings, and then go into the iTunes at app store, tap on your Apple ID, which is the button there that has your picture and your name next to it, then view the Apple ID, then Subscriptions.

When you’re signing up for something to disable the auto‑renew function off of that, and set a reminder. If there is a free trial on your calendar, just before the trial period ends, you can consider canceling before you get charged.

Technology really is your friend in this regard. You should be able to set a pretty easy reminder, just by asking your phone to do that. It can be canceled, whatever it is that you are looking to cancel.

The only thing that I would recommend on top of that is to set an annual reminder to do this.

[background music]

Victor:  As I mentioned, I think that there’s certainly some risk over time that we can get some bloat back again. You can just find yourself in the same situation if you are not diligent about looking at your free trials that turn into subscriptions, that turn into this debt by a thousand bucks.

Listen, we’re going to take a quick break. When we come back, we’re going to finish with the last topic of the day. Stick with us. We’ll be right back on Make It Last.

Announcer:  Imagine if the attorney you trust to protect your legal interests could also be trusted to protect your retirement wealth. One trusted adviser, dual fiduciary roles, Victor J. Medina. Mr. Medina is in an estate planning and certified elder law attorney with a national reputation. He is also a certified financial planner professional.

Through his law firm, and independent registered investment advisory company, Mr. Medina provides 360‑degree wealth protection strategies for individuals in or nearing retirement. His unique approach offers advantages to high‑wealth individuals seeking conservative advice and a professionally managed approach to their retirement wealth.

Learn more. Call 609‑818‑0068. That’s 609‑818‑0068, or listen to the newest episode of Make It Last Radio, Wednesday mornings at 11:00 on 1450 Talk Radio. Investment advisory services offered through Palante Wealth Advisers LLC, a New Jersey and Pennsylvania registered investment adviser.

Victor:  Welcome back to Make It Last. We’ve been talking today about financial decision making, things that can impact your ability to make a great financial decisions as you get older. We’ve been talking a little bit about scams that people are using around gift cards to try to take your money away.

I wanted to end in this sweet of potpourri topics about new financial apps that aim to protect the elderly. I’ve come across a growing crop of financial tools, online tools, that are meant to help adult children manage and monitor their parents’ finances and their well‑being as well.

The rise of these services really comes as financial companies look to technology to cater the changing needs of an aging population.

I suppose another benefit or bonus for these companies is their opportunity to develop relationships with the adult children, who are probably going to end up being beneficiaries of whatever wealth transfer is coming in later years. They call that trying to reduce attrition or increase yield.

What they’re really looking to do with these tools is leverage forms of artificial intelligence to help users perform a range of tasks, whether it’s paying bills or monitoring accounts for suspicious activities and things like that.

These services can assist in curbing exploitation by unscrupulous caregivers or helping family members restrict spendthrift behaviors by parents who are in cognitive decline. This is really, I suppose, an early look at where we’re going with this.

While a lot of the tools that have been created in the financial services world that really try to leverage online stuff have been…There have been tools that have been created. Most of them have been focused at the younger crowd, millennials. I don’t know what they call people who are even younger than millennials, but they don’t have any money anyway.

The millennials, they’ve got jobs and maybe they’re saving something. The idea is they’re trying to reduce the friction between those two things, having people have money and being able to manage it and make money off of them.

They really haven’t been focusing on the older folks. This is not withstanding all of the news that’s out there that says that the most growing part of the population is the baby boomers. Not growing, but there’s going to be 10,000 baby boomers turning age 65 every day between now and the year, I think, 2040 or something like that.

It makes sense that we should pay attention to these folks. These FinTech or these financial technology companies should be doing that. As I’ve been trying to illustrate in the suite of today’s topics, this is going to be an ever‑increasing or growing set of concerns.

As people get older, their ability to make financial decisions is being reduced. It’s lessening. They are more susceptible to attacks, scams, frauds, all that kind of stuff. What we want to be able to do is help these folks not get injured that way.

A couple of tools that I want to share with you, specifically, in that world. One is a company called EverSafe. What this is, is an account monitoring tool that’s aimed at finding financial exploitation. There’s another one called True Link Financial, which offers a prepaid debit card that can be customized, both to limit how much money someone can spend, and where they can spend it.

This is a great solution for people that are in the beginning stages of Alzheimer’s or something similar, where what they want to do is make sure that the money…They’re still autonomy. We want to make sure that people are still living independently, that they are living with dignity, and that not all control has been wrestled away.

They also want to make sure that they are controlling for bad things that might happen. Something like this works really well, especially when we limit where it can be spent. Not how much can be spent, but we can limit where. Maybe you don’t have to take away the QVC spending, but we can limit it to $40 a month, and then people have the opportunity to use some of that money for that.

Or maybe we’ll give somebody full autonomy to manage their finances, but they are going to be able to spend money only on the grocery store or the bills or something along those lines. That is a fantastic way to help somebody who is struggling with this kind of cognitive decline, again, maintain their dignity. That’s really what we’re looking for.

Most of these folks have lived a life, a tremendous life ‑‑ I keep using this word ‑‑ but dignity that they’ve come through. As they get older, their biggest fear is that they will lose all of that. We don’t want that. We want to be able to help provide that along the way.

There are other solutions that I think are good ones to look at. There are companies that will analyze accounts to eliminate unnecessary expenses, help with bill paying. Talked a little bit about some of those in terms of subscription plans and things like that. There are financial decision‑making assessments.

Wealthcare planning offers a tool that assesses older people’s financial decision making capabilities, suggest specific steps for families to prepare for future challenges that are facing these older folks.

There definitely is a market need. Looking at the Consumer Financial Protection Bureau, they’ve put out statistics that said in 2017 seniors experienced 3.5 million incidents of financial exploitation, including fraud perpetrated by strangers, theft by caregivers. Adults, aged 70 to 79, are estimated to have lost an average of $43,000 in each reported case of financial abuse.

Now, most of these tools that are aimed at a senior population are actually targeted at adult children. We might call these people folks that are in a caregiver or sandwich generation. Those people that are caring for parents, as well as their own children, is what makes them in the sandwich.

They’re already familiar with things like online banking. They’re willing to try new services that might save them time. What has changed over all of this ‑‑ just the way families live ‑‑ what’s changed over time is that people don’t live with their parents any longer. They don’t even live nearby. We are very mobile. We’re very nomadic.

How do you take care of parents when you live 3,000 miles away in a different time zone? You do it online. You do it on your phone. You do it with an app. You do it when there’s something alerted on your watch that says, “Hey, watch out for this, that, or the other.”

In order for adult children to access their parents, they’re going to need things like their permission or power of attorney. There are a couple of good stories that help underline or underscore what the benefit of this is.

There is a gentleman named Mr. Olinger, who’s a 60‑year‑old tech entrepreneur in the Bay Area. He came up the with the idea of Golden Core, which is one that helps eliminate unnecessary expenses and a lot of things, because the bank alerted him that his 84‑year‑old father had missed a mortgage payment three months in a row.

When he went over the bank statements, he realized that his dad, who was otherwise independent, I suppose, needed help managing his money. He shaved almost $18,000 a year from his annual expenses by canceling. Watch this, a 427‑channel cable contract in subscriptions to magazines he no longer read.

The whole concept behind all of this is really trying to make sure that we are putting in place the safety nets so that as people decline, as people get older, we can catch them. We can give them the opportunity to not fall flat on their face. I see this a lot in both of the areas of my businesses.

I see that in the elder law planning, where we’re looking at asset protection and protecting assets against the costs of long‑term care. All of that, I see that every day, because I’m watching a lot of children come in to help with planning for their parents. I’m also seeing it on the financial side.

In the way that it manifests itself there, it’s often, when I review what the recommendations are for a particular financial plan, whatever that is. When I see that, I’m seeing recommendations that purely benefits the adviser but not the clients. The client is losing the ability to latch on to the important parts of financial literacy and decision‑making.

What I observe is happening is that they are giving up on processing it. It’s very difficult for them to admit that there’s some form of a shortcoming on what they’re doing. Because it’s difficult for them to admit that, they give over, completely give up and give over all of the responsibility for these kinds of decisions, and just hope and pray that it works out OK.

Here’s the thing. In many cases, it turns out to be OK. These people aren’t bankrupted for what they’re doing. It’s also not really what they need. The best way to make sure that you are getting the advice that you need, that someone is committed to doing that is always, always, always work with a fiduciary who is out there looking for your best interests and not just their own.

How can we do that? If you work with a lawyer, a lawyer is putting your best interests ahead of their own. You want to be searching for a lawyer that is really good at talking about everything that the senior might encounter in their lives. Not just the legal planning documents but the financial documents. Not just the financial documents but the taxes.

You want the entire spectrum of that being covered by somebody really knowledgeable to do that. One of the ways that you can help control for that is to work with somebody that is a certified elder law attorney or CELA.

Those are the folks that passed exams, a very difficult exam, but they passed the exam in order to demonstrate a level of expertise, knowledge, experience, skills, all in and around to dealing with issues that seniors encounter.

You can take the next step. The next step is to essentially bring somebody on board who is also not just a lawyer but also has the financial background. They’re a certified financial planner. Not just that, but they have designations in retirement planning.

We have to take that one layer more because those people can still be doing things that are not looking out for your best interest. What do we want after that? We want somebody that is a registered investment adviser, an independent financial services professional, who has to, by statute, put your best interest ahead of their own.

You’re looking for somebody that works through an RIA, because those RIAs are contractually obligated, statutorily obligated, to put your best interests ahead of their own, be a fiduciary, work with everything that’s out there to find just the things that work out in your best interest.

That’s really what you’re looking for. If you want some more information about that, I can offer you a really insightful report that will help you determine who you should be working with when you work in the whole financial sphere. The way that you do that is, I want you to text the word, questions, plural, questions, to 609‑554‑5936.

You put the word, questions, into your text message app. You send it to the number, 609‑554‑5936. What you’re going to get back are nine questions to ask your next adviser or your current adviser, and understand who it is that you should be working with, and what’s going to make them important.

What we’re looking for here is a guide so that you are able to make great questions and great decisions around who to be working with. If you don’t have a list of questions that will help you determine who you should be working with, you’re just going to fall for some fancy titles.

You don’t know if they’re going to be the right fit. This whole guide has got questions that you should ask, like, how do you get paid? Why did you start in the business? What costs do I have to pay in addition to your fee? I’m going to try to give you these interview tips to help you make sure that the adviser is the right fit for you.

It’s completely complementary. All you have to do is text the word, questions, to 609‑554‑5936. You want to read this guide before you hire your next financial adviser. I wouldn’t want to start working with somebody before I knew the answers to those questions. That’s what you want. Just text, questions, to 609‑554‑5936. It’s, questions, to 609‑554‑5936.

That’s going to mark the end of another episode of Make it Last. I really hope that you enjoyed this show. You get a little potpourri of different topics. We’re going to return back to our more encompassing show themes when we come back for next week.

If you enjoyed this, and if you enjoy the show regularly, the best thing you can do is share it with a friend. You do have a friend out there that would love to learn more about the important things in and around legal and financial retirement planning, and what they should be doing to make sure that they get their ducks in a row and their financial nest egg secure.

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Victor:  That’s what you’re going to get with Make it Last. Share the show with them, either in podcast format, or tell them to tune in at 1450 AM at 11:00 AMs on Wednesday, when we’re not getting pre‑empted by the Patriots’ game [laughs] . There’s going to be a show sometime on a Wednesday at 11:00. Just keep tuning in. Otherwise, get on to the podcast.

That’s been it for me. This has been Victor Medina. This has been Make it Last. We’ll catch you next week on the next week’s show. Talk to you later. Bye‑bye.

Announcer:  Investing involves risks including the potential loss of principal. Any references to protection, safety, or a lifetime income, generally referred a fixed insurance products, never securities, or investments. Insurance guarantees are backed by the financial strength and claims‑paying abilities of the issuing carrier.

This radio show is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual situation.

The host of this show is not affiliated with or endorsed by the US government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable. Accuracy and completeness cannot be guaranteed.

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