How To Protect Yourself and Your Savings From Cyberfraud, Ep # 185

You have fraud protection on your bank accounts and your credit cards, but what about your retirement accounts? Today we’ll explore an article from the Wall Street Journal outlining a case of cyber fraud in a 401K account. We’ll also discuss ways for people to safeguard their savings. 

In the listener questions segment, I’ll answer a question about buying an RV in retirement and we’ll wrap up this episode with a question from Hal about whether to make Roth conversions or pay off the mortgage. Press play to get started on this episode of Retirement Starts Today. 

Outline of This Episode

• [1:22] Retirement accounts are not offered the same protections as 401K accounts
• [3:04] Steps you can take to protect yourself from cyber fraud
• [6:20] John asks whether to get a loan for his RV or use his retirement account
• [12:36] Hal asks, Roth conversions or pay off the mortgage?

Retirement accounts are not offered the same protections as 401K accounts

Our retirement headline this week is titled Retirement Planning Gives Bigger Role to Theft Prevention as Risks Lurk Online. This article warns us against cyber fraud of retirement accounts. The laws regarding retirement income were enacted well before the internet, so they don’t address who should be responsible for this type of crime. We often have more money saved in our retirement accounts than in our checking accounts, so this kind of theft can be life-changing. 

Retirement account cyberfraud is increasing 

Retirement account cyber fraud used to be typically perpetrated by members of one’s own family, but in the past few years, strangers have played a bigger role in committing these types of crimes. 

The article highlights one particular case where the account owners were shocked to discover that ⅔ of their retirement savings had been transferred to an unknown account. The couple then had to postpone their retirement indefinitely. 

5 steps you can take to protect yourself from cyberfraud

If you don’t want to have this happen to you there are steps you can take to protect yourself from cyber fraud. 

1. Have an online account. Even if you prefer paper statements, set up online access since unclaimed online accounts are easier for impersonators to set up and control.
2. Check in regularly. Check your 401K account along with your email and street addresses monthly. You can also sign up for text alerts that notify you of changes or transactions. Make sure to use multifactor authentication which verifies your identity by sending codes to multiple devices.
3. Practice good internet hygiene. Avoid public wi-fi and never click on emails or texts that seek personal information including passwords. Make sure to install software updates regularly.
4. Create good passwords. Choose a unique password and keep them confidential. If you use a third-party service to help you remember your financial passwords understand that could be grounds for denying reimbursement of any stolen funds. 
5. Evaluate the logistics of how you withdraw money from your retirement accounts. Check with your custodian to see what the protocol is for moving money between accounts. 

Thieves always want to be ahead of us and the regulators so we have to stay on our toes. Listen in to hear the tips on how you can protect your hard-earned money and retire comfortably. You’ll also hear the answers to 2 relevant listener questions. 

Resources & People Mentioned

• Retirement Planning Gives Bigger Role to Theft Prevention as Risks Lurk Online
• Retirement Answer Man episode 263

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