Protecting Your Investments: Scams and Fraud

When you’re the victim of credit card fraud, there is recourse. But what about your retirement account? It could be subject to the same kind of risks, but your plan likely doesn’t guarantee that your funds will be returned to you in full. This is a growing phenomenon. What you can do to protect yourself and your savings?

Hacks resulting in the theft of personal information from 401(k) plans are more prevalent than those involving stolen money, but instances of stolen money are growing, according to some industry professionals. Unlike with credit card fraud, reimbursements are not guaranteed.

What does this mean for you? Many people have the majority of their savings in a retirement account such as a 401(k) or other company sponsored plans. Just like protecting yourself from market risk, you should protect yourself from theft.

What can you do to prevent theft?

  • Learn how to recognize cyber security threats.
  • Keep your passwords secret, and don’t use your “usual” password for money-related accounts. It is hard to use different passwords for every on-line account you monitor, but be particularly protective of your savings.  Someone hacking into your Netflix account may not be as serious of a problem; improper access to your bank account or 401(k) account, on the other hand, is very serious.
  • Stop posting personal information on social media. Pet’s names, places of birth, etc. – a quick search through your social media history could yield the answers to “security questions.”
  • Opt for paperless statement delivery. Paper statements in the mail are an easy target for someone to steal and get balances, vendor information, etc.
  • Talk to an advisor about how to take control of your retirement savings that are in a 401(k).
  • If you’re nearing age 55 or 59 ½ there may be options, such as rolling your 401(k) into an IRA.

For many Americans nearing or in retirement, your 401(k) is one of your most valuable assets. Risks come with retirement. Don’t let theft or fraud be one of them.