It appears that it’s easier for a thief to set up a new online account for your retirement savings than it is to hack into your existing online account.

 

By James Ward

James Ward

Passwords, computer security, multi-factor authentication, fingerprint identification, voice recognition technology, and many more steps can be used for security, but what do you have in place for your accounts? How strong is your digital protection?

Where do you keep your retirement savings?

Many people may have $20,000 to $50,000 in their bank accounts, but $300,000 to $500,000 in their IRA or 401(k).

Federal law provides some protection for bank accounts, credit charges, and debit charges, but no such protection exists for retirement accounts — and more and more of these retirement accounts are being hit by theft.

I frequently encounter clients who don’t keep much money in their regular bank accounts, but they might have $500,000 or $1 million, or even $2 million or more, in their retirement accounts all at one institution under one password. Are these accounts secure?

Theft by family members is unfortunate, but certainly nothing new. The new trend that experts have been seeing is a rise in online theft from retirement accounts by strangers. Even the industry experts have been alarmed.

Nationally, these accounts hold more than $20 trillion. That’s a lot of dough, and it represents a rather enticing target for thieves.

The retirement industry is alarmed by what they’ve seen, and the companies managing the accounts spend millions of dollars each year on their security systems. But what happens to you and your family if the money in your own account goes missing? Will it be recovered? Will the institution replace it?

A few of my clients have been scammed into transferring money that later goes overseas, and the police and FBI have generally said that the funds can never be recovered.

But what if you aren’t scammed, but your account is hacked? Will the institution replace your lost funds?

In some cases, the institution might say that you didn’t follow the recommended security protocol, so the institution isn’t liable and doesn’t have to replace the stolen funds. Is that you?

One surprising recommendation of some experts is that you set up online access to your accounts even if you have no desire to go paperless. Why? It seems like this would lead to more security problems, but it’s apparently easier for hackers to set up a new online account for your funds if there isn’t already an online account in existence.

Yes, it appears that it’s easier for a thief to set up a new online account for your retirement savings than it is to hack into your existing online account.

Once you have an online account and a good, solid, unique password, experts recommend that you check your account at least monthly to verify balances and your email and street address, and sign up for text messages to alert you of any changes to your account.

And when possible, opt for multi-factor authentication which verifies your account security through multiple devices besides just your password.

If your retirement nest egg is something you’ll need for your own expenses, or something you expect to leave to your heirs, protect what you have. Whether you’ve inherited it or worked for it, it’s your money. Don’t let it slip away to strangers.