Investors have more responsibility than ever for achieving their financial goals.
When it comes to retirement, the days of corporations managing pension plans for their workers are dwindling, and have been for a long time. Social Security is expected to replace less and less of the income a retiree earned while working. Instead, workers increasingly have had to fend for themselves by setting up their own retirement accounts or participating in the retirement accounts offered by employers, such as 401(k) plans.
Texas' senior population is booming: Three of the Lone Star state's metropolitan areas recently ranked in the Top 10 U.S. metro areas with the fastest-growing senior populations. And as the state's senior population grows, so does the risk of investment fraud being perpetrated on older Texans.
Many seniors, of course, can ably manage their family finances and also have the assistance of trusted professionals such as financial advisers, lawyers, and accountants. However, there is no denying the research indicating that as people age they have more difficulty handling complex financial tasks such as managing their retirement funds. The risk of financial fraud is compounded by the fact that persons who suffer from some degree of cognitive impairment don’t fully grasp the decline of their decision-making abilities. Fraud against seniors is particularly devastating because compared to younger investors, there isn't as much time for a senior citizen to make up for investment losses.
Seniors should practice financial self defense by knowing the questions to ask when they are pitched an investment product. By the same token, seniors' investment professional, family members, friends, and caregivers need to know the questions to ask when they suspect fraud.
Saluting the Military With Financial Guidance
The State Securities Board offers two publications for members of the military and their families. They are available online and in print.
The Salute to Smart Investing provides active military members with the knowledge and tools they need to achieve financial security, and helps them identify and avoid frauds that specifically target the military. The guide covers investment "basic training," which includes budgeting, saving, and credit; the basics of saving and investing; balancing risk and reward in investing; retirement planning; and recognizing inappropriate investments.
The Veterans Handbook: Tactics for Civilian Life helps veterans and soon-to-be vets identify the professional, financial, and personal choices that come with a shift to a civilian career. Topics include building a short-term emergency fund and setting long-term goals in saving and investing; avoiding financial problems that arise from investment fraud and pension-related scams; the job hunt; obtaining a mortgage; and details of the post-9/11 GI Bill.
Investor Education for Students — and Their Teachers
The majority of U.S. states, including Texas, have adopted some form of mandate to teach courses that fall under the umbrella of "personal financial literacy." The Basics of Saving and Investing: Investor Education 2020 is a Texas Education Agency-approved program for the classroom that includes a curriculum guide for teachers. Unlike some other TEA-approved guides, Basics of Saving and Investing has no corporate affiliation, having been developed by the nonprofit Investor Protection Trust.
For teachers who want to learn more about making and managing their own investments, The Value of Investing for Teachers is a primer on the basics of investing, written specifically for school district employees. Since most school districts do not participate in Social Security, employees must depend on the Teacher Retirement System pension fund and their own retirement savings for a secure retirement.
The Value of Investing explains how to invest and the core principles that should underlie investment decisions, with an emphasis on cost, investing for retirement, and avoiding scams. Enforcement actions taken against promoters of fraudulent investments to teachers were one reason the presentation was developed.