Protecting your finances is always important. But as you approach retirement, with less time to bounce back from any missteps, it becomes even more critical to avoid fraud, identity theft, and other threats. Below, we discuss a few tips and tricks to help protect yourself.

Understanding the Risks

You likely already know the basics of avoiding fraud, such as making sure you don’t provide sensitive account information via text or email, giving someone else access to your account, or clicking suspicious links.

But sometimes, the fraud may come from an unexpected source. Each year, the SEC and other federal enforcement agencies charge corporate officers who have diverted employees' 401(k) contributions for their own use.¹ It's crucial to carefully review your quarterly statements to ensure that your contributions are being timely deposited and invested in the products or funds you've chosen.

Fortunately, this sort of internal fraud is less common than external scams. Below are a few other ways to protect yourself against retirement fraud.

Tips to Protect Yourself

Stay Informed and Educated

Scammers seem to be one step ahead of the law — and often, unfortunately, their victims. By staying abreast of the newest scams and tactics, you'll be more likely to spot them on their next attempt to swindle you.

Your state's attorney general may have consumer protection resources available, from bulletins on common scams in your area to contact information for assistance if you've been targeted.

Secure Your Personal Information

Keeping your sensitive financial information under wraps doesn't need to be time-consuming. By getting in the habit of shredding sensitive documents instead of throwing them away and avoiding sharing personal information online or over the phone, you're already ahead.

If you'd like to be even more careful, freeze your credit. This prevents anyone from taking out credit in your name. If you yourself need credit (like an auto loan or a home equity line of credit) you can simply unfreeze your credit, apply for the loan, and then freeze it again.

Monitor Financial Accounts

Regularly review your bank statements, credit card statements, and investment accounts to quickly spot any discrepancies. Often, scammers will begin by making one or two small transactions to see whether they're detected. If nothing happens, they'll begin raiding your accounts more rapidly.

Use Strong Passwords and Two-Factor Authentication

It can be tempting to reuse the same handful of passwords for all your accounts. But doing so can be risky if even a single password is compromised. Create unique, complex passwords for your online accounts and use a password manager if you need help remembering them.

It's also a good idea to enable two-factor authentication whenever possible. This ensures that someone who accesses a password can't get into your account unless they also have your phone.

Be Extra Skeptical of Unsolicited Offers

As the saying goes, if it seems too good to be true, it probably is. Don't respond to unsolicited phone calls, emails, or snail mail asking for personal information, even if you’re told it's for your benefit. Always verify the legitimacy of any requests before providing sensitive information.

As you approach retirement, it's important to take proactive steps to protect yourself against fraud and identity theft. The steps outlined above can go a long way toward ensuring a financially secure retirement.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking # 564712

Footnotes

¹ “401k Scams to Avoid,” Investopedia, https://www.investopedia.com/401-k-scams-to-avoid-5425468