Wealth From Wisdom December 2018

Stop Donating to Scammers How to Spot Fraud This Holiday Season

D uring the season of giving, charities receive a much-needed rush of donations as people open their hearts to others. Unfortunately, criminals are all too willing to abuse this goodwill. According to a report from the Justice Department, Americans over the age of 60 lose over $3 billion a year to scams and fraudsters. As charity scams reach their peak, here’s what you need to do to ensure your donations aren’t lining the pockets of criminals. Charities regularly reach out to past and potential donors through traditional mail, email, phone calls, or text messages. This means fraudsters will mimic their approach with less noble intentions. Because it’s impossible to determine who is on the other end of a call or email, you should never hand over your credit card information to strangers. If you really are speaking to a representative from a legitimate charity, During the various stages of retirement, your assets may be more or less vulnerable to different retirement income challenges. These include market volatility, taxes, inflation, spending behavior, and longevity. For instance, during the early stages of retirement, it’s critical to protect your assets from excessive market volatility and aggressive spending. That way, you don’t diminish the value of assets needed to generate income throughout your retirement. Later, your assets will typically be more vulnerable to the impact of inflation and an increase in medical expenses as you age, and they’ll require extra special attention. Here’s how typical retirement spending breaks down. Early Stage: Ages 60–74 Retirees in the early stage of retirement tend to be the most active and spend the most money. Many find they will need 80 percent or Never Give by Phone or Email

they will direct you to a secure avenue where you can give without worry.

Feeling Pressured? Walk Away

A lot of charities set goals they want to reach before the new year, but even groups that are hoping to raise a certain amount of money know better than to pressure donors into giving. Donations should always come from the heart, and it’s a bad sign if someone insists there’s a deadline for giving. As the Better Business Bureau says, “Responsible organizations will welcome your gift tomorrow as much as they do today.”

established charities are. Even legitimate organizations can be misleading about how they spend their donations. A good rule of thumb is to avoid organizations that spend more than 25 percent of donations on salaries or administrative costs. There are many amazing charities and organizations that do good work. Stay vigilant to make sure you are bringing joy to the world and not falling for a criminal looking to make a quick buck.

Only Give to Reputable Charities

Do some research before donating to charities. Look up any prospective charity on Charity Navigator at CharityNavigator.org. This service flags “high concern” organizations suspected of fraud and ranks how reliable

The 3 Stages of Retirement Spending

Middle Stage: Ages 75–84 Spending tends to level off midretirement for a number of reasons. This can include paying off a mortgage, downsizing, or selling a second car, boat, or vacation home that you no longer use. Additionally, a less active lifestyle or the loss of a spouse can also contribute to a reduction in spending. Late Stage: Age 85+ Spending tends to pick up again in late retirement, primarily due to a rise in the cost of goods and services over time and increased medical expenses associated with aging. Hospitalization, in-home care, or nursing-home care can drive up expenses substantially during the late stage of retirement. Retirees in good health moving to an independent-living facility may also see an increase in daily living costs due to paying rent and other facility charges, especially if they had previously been living mortgage-free.

more of their annual preretirement income to support their lifestyle. It’s not unusual for retirees to find that

they’re actually spending

more than when they were working.

After all, they now have additional time for leisure activities, eating out, and travel. However, overspending at this stage can be detrimental to your long-term goals if it leads to a reduction in the investment principal needed to generate additional income to support the later stages of retirement.

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