Beware of Retirement Investment Scams!

By | November 16, 2018
Money Fight Cartoon

I don’t have to warn you  to beware of retirement scams. We are all aware that it’s big business, these days.

Scammers are everywhere and there are a multitude of websites that warn everyone to beware. There are also a multitude of sites owned by scammers clever enough to appear as credible.

Retirement is something we all anticipate eagerly even if we love our careers.  It’s an opportunity to live on our own terms and pursue interests and pastimes we didn’t have time for while we were earning a living.

So while getting our ducks in a row and trying to decide what we want to be when we grow up, dozens of opportunities pop up in email messages and snail mail.  Investment schemes, employment schemes, health care schemes, and on and on.

Here are a few  tips on how to spot scammers:

Money grabber cartoonAccording to the Financial Industry Regulatory Authority (, it’s so easy to be reeled in by so-called financial “experts” promising early retirement options that are not really employer-sponsored.

An example on the FINRA website describes how a brokerage firm offered free seminars near the place of employment to pitch their recommendations on how to:

  • Retire early
  • Cash out of their 401 (k) or take a lump sum of their pension’s value and
  • Open an IRA at the broker’s firm investing in high risk and high fee securities.
FTC Scam Info

FTC Scam Notice

Tips to help you avoid being scammed by unscrupulous brokers.

  1. Be wary of  “Free lunch” seminars near your place of employment;
  2. Don’t fall for early retirement advice using little known “loopholes”;
  3. Consider the tax consequences before cashing in on your 401 (k).  Best advice: check with a tax professional before withdrawing any funds.
  4. If you’ve got outstanding debt (child support, credit card debt, alimony) your creditors may be able to collect against any funds you receive even if you’re rolling it over into another investment IRA.
  5. Be wary of variable annuities as there are a variety of charges associated with these investments.
  6. If you do attend a retirement seminar, always check the speaker’s credentials. Be sure they are registered with FINRA or the SEC.  Check through FINRA BrokerCheck or call their Hotline at (800) 289-9999.  Even if the broker is registered, be sure to look for any red flags such as disciplinary actions.
  7. Before committing to any early retirement plan, get a second opinion!

Remember, there is an additional 10% tax placed on withdrawals before age 59-1/2 any retirement plan, including traditional IRAs.

2018 Scams Targeting Seniors

Scams targeting seniors are considered the “crime of the 21st century.”

A recent article from the National Council on Aging lists the top ten financial scams.  I’ll list them here but please read this article for all the details.

1. Medicare/health insurance scams: scammers may pose as Medicare representatives in order to get your personal information.

2. Counterfeit prescription drugs: This is typically internet based to sell drugs that could actually be harmful as well as taking your money.

3. Funeral & cemetery scams: Scammers search for obituaries, then take advantage in a number of illegal schemes. You’ll also learn about disreputable funeral homes and how they might work.

4. Fraudulent anti-aging products: One of the worst anti-aging scams is fake botox which can be dangerous, as well.

5. Telemarketing/phone scams: These scammers are very, very hard to trace and they work through a variety of schemes.

6. Internet fraud: According to the article, here’s how this might work – “Pop-up browser windows simulating virus-scanning software will fool victims into either downloading a fake anti-virus program (at a substantial cost) or an actual virus that will open up whatever information is on the user’s computer to scammers.” 

7. Investment schemes: You’ve heard of Bernie Madoff? Need I say more?

8. Homeowner/reverse mortgage scams: My husband and I almost fell for one of these scams many years ago. Thank goodness we did some investigating and learned a lesson.

9. Sweepstakes & lottery scams: Just remember, there’s no such thing as a free lunch!

10. The grandparent scam: I honestly don’t know how a person could fall for this but it’s a big, big problem.

I’ve just updated this post. I hope you find it useful. If so, please share on you social media sites.

You may want to read my post on Work From Home Scams, as well.  It’s shocking how many people are reeled in by these schemes.

UPDATE: June 25, 2018 – I’ve just read the following report: 

MOBE is officially a scam

I’m always interested in feedback and suggestions based on personal experiences so be sure to let me know in the comments if you’ve got something to add to this post.


Cheryl Kohan

4 thoughts on “Beware of Retirement Investment Scams!

    1. Cheryl Kohan Post author

      Thank you very much! I’m trying to post as much helpful information as I can. I would love it if you would share via Twitter, FB, etc., too.

  1. Debbie

    Great post – I agree. It is amazing how many people prey on everyone’s fears, especially in this economy.

    1. Cheryl Kohan Post author

      Debbie, your feedback is so appreciated. I cannot believe how many people fall for these scams! And there are an equal number or more scams out there targeting those who want to work at home, as you may have noticed in my post on Work at Home Scams.


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