S.O.S.

I like to think that age confers not only wisdom but morality--as the appointment with one’s maker nears, morality starts winning (e.g., the Picower settlement) in the conflict between God and Mammon. It’s logical to believe that old people care less about the world and think more about eternity. But that would be wrong.

Another of my cherished myths has been exploded, and not just by elderly Ponzi schemer Bernard Madoff.

A grim category of crime is on the rise: senior-on-senior financial fraud [bold added]. According to regulators and prosecutors, there has been a significant increase recently in the number of cases in which older investors have been taken advantage of by elderly scam artists.

Seniors are easy prey.

Elderly investors are natural targets in part because they may be more susceptible to fraud. A 2008 study by researchers at the Georgia Institute of Technology found that older adults are significantly worse than younger people at detecting whether someone who may have stolen money is telling the truth.

What's more, according to research by Harvard University economist David Laibson and his colleagues, the typical person's ability to make astute financial decisions peaks at about age 53, then wanes with each passing year; another study found that investing ability takes a steep drop after age 70.

Adding to elders’ vulnerability are the declining size and geographic dispersion of their families.

It’s in everyone’s interest (but the crooks’) to get not only their estates in order but also make arrangements such as powers of attorney and conservatorships to help wall off the thieves. But that involves money, time, planning, and perhaps, most difficult of all, frank communication between people who may not have been talking much.

It’s too easy to put this stuff off until the appointment day, when it’s too late. There may not be much stuff left. © 2010 Stephen Yuen