Financial literacy is a key element in avoiding financial exploitation and ensuring financial security in retirement.
With the decline of traditional employer-based pensions (defined benefit plans), retirees are increasingly responsible for managing their own retirement assets. Effective financial education and enhancing the federal government’s role in this area could help retirees ensure that they have adequate retirement income.
Financial products targeted at older Americans are increasingly complex, and may carry both benefits and the risk of exploitation.
- Reverse mortgages are a type of loan against a borrower's home that provides a lump sum or periodic payments to the borrower—and they can help seniors face financial hardship or improve their quality of life. They are growing in popularity as a supplement to retirement income, but they are also relatively complex and costly, and the population they serve is vulnerable.
- Annuities with guaranteed lifetime withdrawals can help older Americans ensure they do not outlive their assets. However, they do present some risks to consumers. We examined the benefits, risks, and regulation of these annuities.
- Pension advances are lump-sum payments in exchange for a retiree’s pension payments. But these products did not compare favorably with other financial products we reviewed, and there are consumer protection concerns.
- Student loan debt and other forms of personal debt can affect the financial security of older people who are approaching retirement. Student loan debt can be especially daunting because, unlike other types of debt, it generally can’t be discharged in bankruptcy. Additionally, social security benefits can be withheld to pay off student loan debt.
GAO-16-647: Published: Aug 10, 2016. Publicly Released: Aug 10, 2016.
The Consumer Financial Protection Bureau (CFPB) has taken steps to solicit, consider, and incorporate inputs from small entities into its rulemaking process, as required by the Regulatory Flexibility Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). GAO reviewed documents from the four Small Business Regulatory Enforcement Fairness Act (SBREFA) pane...
GAO-16-242: Published: Mar 1, 2016. Publicly Released: Mar 1, 2016.
Household spending patterns varied by age, with mid-career households (those aged 45-49) spending more than older households. For example, according to 2013 survey data from the Bureau of Labor Statistics (BLS), mid-career households spent an estimated average of around $58,500, while young retiree households (those aged 65-69) spent about 20 percent less. While the share of spending was consisten...