Entering what are supposed to be the “golden years” of life, older Americans may be posing a threat to their nest eggs by shying away from discussions about potential challenges or needs as they age, new survey results show.
According to the 2018 Wells Fargo Elder Needs Survey, many older Americans are not yet talking with their families about the kind of help they may need, their plans for health care, their estate and other basic plans for aging. In fact, more than one-third of older Americans say it is difficult to talk with their children about challenges they may face as they age, including one in four (24%) who say it is difficult to talk about money and finances. Adult children apparently find such conversations even more difficult, with one in three (34%) saying it’s difficult to discuss issues surrounding money and finances.
But the biggest reason most families have not yet held these conversations is over a perceived lack of urgency, even among older parents age 80 or higher. According to the findings, more than half of older parents (57%) say having a conversation about wants and needs later in life is a low priority and a third have never discussed it with their family. Similarly, adult children appear to be avoiding these conversations because they perceive them to be either a low priority (32%) or because they could cause conflict (23%).
Yet, four out of five adult children would prefer that their parents plan more so they do not have to intervene, in contrasted to the 35% of older Americans who say that too much planning would get in the way of enjoying life.
“Some older adults may struggle to see the need to plan for issues they may face as a result of aging. They spend a lifetime preparing for retirement, but then fail to plan to see themselves through retirement,” says Ron Long, head of Regulatory Affairs and Elder Client Initiatives at Wells Fargo Advisors. “This unwillingness to plan and have hard conversations about aging is increasing senior vulnerability and leaving gaps in protection.”
Meanwhile, three-quarters of older Americans (74%) report having a written will, but fewer report having other legal and financial documents in place:
- 60% have an advance health care directive;
- 59% have a power of attorney for health care; and
- 48% have a power of attorney for financial matters.
Despite these findings, one in six report that their documents are out of date, the study notes.
Scams and Financial Abuse
Many older Americans recognize the prevalence of elder exploitation and scams, but few believe they will fall victim themselves, resulting in key protections not being in place.
Nearly all older Americans (98%) say that older people are susceptible to scams, as do 98% of adult children, but only 1 in 10 say they are susceptible to scams and only one in four (24%) worry about it.
Perhaps of even greater concern is the misunderstanding of who targets seniors, the study notes. While 68% say strangers are the most likely perpetrator of financial exploitation, followed by hired help (24%), less than 1 in 10 (9%) say that family members are the most likely perpetrators, despite family members being among the most common perpetrators, according to data by the National Adult Protective Services Association.
The study recommends a number of actions individuals can take to protect themselves from elder financial abuse and exploitation:
- Talk with trustworthy family members about your financial plans.
- Update legal documents, such as wills, an advance health care directive and powers of attorney for financial matters and for health care.
- Sign up for direct deposit, annual credit report checks, automatic bill pay and automatic alerts of large transactions sent to a trustworthy individual.
- Avoid isolation through social activities.
Conducted between Feb. 26 and March 15, 2018 by Versta Research for Wells Fargo, the survey consisted of a national sample of 784 older Americans (ages 60 and up) with at least $25,000 in investable assets and a separate group of 798 adult children ages 45 to 59 with at least $25,000 in investable assets who communicate with a parent regularly.
