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Watch Out for Retirement Scams – How to Identify and Prevent Them?

ElitePersonalFinance

Last Update: March 26, 2025 • Financial News •

Very much like the Change of Address and “Good to Go” toll scams covered earlier on ElitrePersonalFinance, and victims of another type of scam have fallen for our retirement savings scams.

One of the most notable cases occurred in August 2024, where 76-year-old retired lawyer Barry Heitin was scammed of roughly 700,000 in retirement savings by a group of criminals pretending to be part of a government investigation. They convinced him to withdraw 740,000 from his savings in IRA’s accounts.

To make matters worse, almost $300,000 in federal and state taxes were charged due to these withdrawals.

It started with a simple attempt at his 401K retirement savings account. After several days of failed attempts, a pop-up window appeared on his computer, instructing him to call a fraudulent number. There, he was introduced to Charles Hunt, a fraud investigator” who wanted to work with him to identify cyber criminals trying to gain access to his account.”

Another petition employee was called into the conversation, who explained to Heitin suspicious activity under his account with fraudulent transactions related to child pornography. From there, a series of questions began, and he was constantly asked if he had any business in China.

After several more calls, Heitin was convinced that following instructions and completing several transactions over three months was the way out. Within a few weeks, more than $100,000 was transferred from accounts, and he was then redirected to withdraw from his retirement savings account valued at close to $1M dollars.

Unfortunately, the scammers convinced them to withdraw most of his retirement savings. Heitin is working with an attorney to recover as much money as possible.

What Does The FBI Say About These Types of Retirement Scams?

According to the FBI’s 2023 Internet Crime Report and data collected by the Internet Crime Complaint Center (IC3), “Impersonation scams defraud thousands of individuals each year. Two categories of fraud reported to IC3, Tech/Customer Support and Government Impersonation, are responsible for over $1.3 billion in losses. Call centers overwhelmingly target older adults, with devastating effects. Almost half the complainants report to be over 60 (40%) and experience 58% of the losses (over $770 million).”

How Do I Prepare for Retirement?

To prepare for retirement, one of the best things you can do is utilize a retirement calculator to determine how much you need to save each month to reach a specific retirement savings goal. You can use it to test different scenarios, such as paying off your mortgage early, planning a large purchase, or withdrawing from your employer-sponsored retirement accounts early.

To determine how much income you need in retirement, these calculators typically enter your current gross income, the years until you begin retirement, and the percentage of current income you want to replace. From there, you’ll provide estimated monthly Social Security and retirement pension income plus savings already accumulated and how much you potentially draw from home equity (as well as other considerations) before arriving at a figure.

One of our favorite retirement calculator resources is Fidelity—Retirement Calculators & Tools. This robust planning and guidance center offers more than 10 different calculators, from savings planners to Roth conversion calculators.

How Do I Identify Retirement Scams

It is very easy to identify and avoid retirement scams.

Here are three of the most common signs:

Threats of Arrest or Legal Action

One common tactic is impersonating government officials and immediately threatening arrests or legal action unless payment is made through specific bank account information or a fraudulent website. Sometimes, they may even ask you to wire money, claiming your assistance as part of a sting investigation.

Sometimes, they’ll even claim that you owe back taxes and that your Social Security number cannot be used for various purposes. Remember that the IRS and Social Security Administration will never contact you through these means.

Inheritance Scams

Another common manipulative tactic among scammers is inheritance claims, where they ask you for your bank account and other personally identifiable information to release the funds. Never believe in financial promises or change any of this information.

Too Good to Be True Investment Opportunity

Sometimes, scammers will go after your retirement funds by pitching increased savings through guaranteed return investments. In exchange for supposed steady returns, they even ask you to provide personally identifying information after exchanging fake reports and other supporting documentation regarding the supposed investments.

The same applies to free money or debt relief, where debt relief programs or government grants are offered in exchange for assistance with paying off living expenses like medical or auto bills. Do you notice half of the upfront charges, are there any of these programs with promises of no strings attached? Then it’s most likely a scam. Always visit official government websites that fraudsters are impersonating to verify the legitimacy of these programs.

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