How safe is your IRA? Not from economic ups and downs, but from your own vulnerability to scammers? While financial scams are often perceived as targeting senior citizens, younger generations are equally susceptible.

Two examples of people who suffered serious financial consequences after being conned into liquidating their IRAs can be found in articles at LawFirmNewswire and MoneyWise. One woman was persuaded to move her assets to a fraudulent program called the IRA Reboot, and another withdrew IRA funds to fund life coaching courses that failed to provide promised support and education.

Let’s explore some ways to protect yourself from similar costly mistakes by becoming more aware of the emotional factors behind them.

1. Never make a distribution from an IRA or 401(k) without seeking professional advice. We often overestimate our ability to handle complex financial decisions without expert help. Many money scripts come into play around the idea of asking for advice, such as: “Consulting a professional means I am stupid,” or “This is too trivial to bother an expert about,” or “I should know the answer.”

There are instances where distributions from IRAs and 401(k)s are allowed for hardships. Yet the rules about those distributions are complex. Spending a few hundred dollars to have an expert help you navigate them could save you years of litigation and thousands in taxes and penalties. If you are ever tempted to liquidate, take a withdrawal from, or borrow from a retirement plan, don’t act until you’ve spoken with a professional.

2. Beware of high-pressure sales tactics. Scammers often use urgency and pressure to push victims into quick decisions, tapping into a scarcity bias that bypasses someone’s rational thinking. This is a good time to practice a strategy many parents find useful: “If you insist on having an answer right now, the answer is no.” Always take your time to research and to consult with a neutral advisor who is not trying to sell you something.

3. Check credentials and reviews. Confirmation bias can lead us to only seek information that supports what we want or what we already believe. Instead, look for both positive and negative reviews of any educational, career, or investment opportunities. Verify credentials of companies and individuals through independent sources. Surprisingly often, just a quick Internet search can show you all the red flags you need. (As, for example, with Future Income Payments, Inc., the sponsor of IRA Reboot.)

4. Beware of promises that sound too good to be true, such as guaranteed high returns with little or no risk. This exploits optimism bias, where people believe they are less likely than others to experience negative outcomes. No legitimate investment or business opportunity can guarantee returns.

5. Diversify your information sources. Relying solely on one source of information can lead to the availability heuristic, where immediate examples have a disproportionate influence on decisions. Consulting several experts and sources, including those with differing viewpoints, gives you a broader foundation for your decisions.

6. Be aware of commitment and consistency bias. Once we have committed money or time, we often feel compelled to continue investing to justify our initial decision. Emotionally, it is not easy to recognize when we are throwing good money after bad and to be willing to cut our losses.

Finally, have the courage to accept that all of us have cognitive biases and money scripts that can make us more vulnerable to scams. Financial swindlers do not discriminate by age. None of us are invincible. To protect ourselves against skilled, unscrupulous con artists, we all can benefit from more awareness of our own emotions and more willingness to ask for help.

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