The financial world is a complex one. It is easy for local residents to get lost in the mire of special accounts and various loopholes to maximize their savings while protecting their hard-earned dollars. As always, the professional guidance of financial experts, estate planning attorneys, and others is usually the only foolproof way to ensure costly mistakes aren't made. This also comes with the added benefit of having a trained set of eyes ensuring that one doesn't fall for one of the many financial scams.
For example, the Wall Street Journal published a story late last month discussing the prevalence of Individual Retirement Account (IRA) scams. A growing number of states have opened investigations into fraud as a result of "self-directed IRAs. These special retirement accounts allow investors to use funds in a range of ways, including things like hedge funds and land purchases. The investments involved in these efforts are not publicly-traded which, officials advise, makes them far more susceptible to fraud.
For example, in one high profile case several defendants were accused of convincing individuals, mostly seniors, to roll their retirement accounts into these self-directed IRAs. Those doing so thought that the decision was a safe alternative to stocks or bonds. In this case, the investors were told that the money would be used to fund profitable small businesses.
In fact, the situation was nothing more than a Ponzi scheme, with the funds used to pay off other investors and fund personal expenses of the ringleader. Many individuals lost substantial sums of money--their entire retirement account--as a result of the scam.
Our New York estate planning attorneys work with residents all over the state on their retirement issues. Unfortunately, too many residents have their golden years filled with financial worry, anxiety, and trouble as a result of being victimized by faulty or downright fraudulent deals. To avoid this fate it is prudent to seek out help with all of these matters; never jump into decisions without professional advice.
It is also helpful to be aware of the situations where scams are most likely to strike. SEC officials explains that for these IRA scams, many investors are courted in organized settings Churches, for example, are prime locations where the unscrupulous try to convince many congregation members at once of the value of the self-directed IRA. Some scammers also try to obtain the approval of the church leader as an endorsement of the opportunity, making it more likely that church members will feel comfortable with the situation.
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