April 2018
Summary: The consequences of poor financial capability at older ages are serious and include making mistakes with credit, drawing down retirement assets too quickly, and being defrauded by financial predators. Because older persons are close to or past the peak of their wealth accumulation, they are often the targets of fraud. Our project analyzes a module we developed and fielded in the 2016 Health and Retirement Study (HRS). Using this dataset, we evaluate the determinants of financial mismanagement and fraud, the incidence and risk factors for different types of financial fraud, and the consequences of financial mismanagement for older persons’ financial security. We find that relatively few HRS respondents experienced any single form of investment fraud over the prior five years, but 8% did report at least one form of fraud. Moreover, one-third of respondents indicated that others had used or attempted to use one of the respondent’s accounts without permission. Nevertheless, we found few readily identifiable factors associated with financial victimization in the older population.