Why you need to stop relying on trust in retirement
Last updated on 15 February 2024
Key points:
- Each year, people of retirement age or older lose approximately $43.2 billion AUD to scams globally
- Nearly three-quarters of that money is stolen by people that the victim trusts
- To check scam alerts, report scams and check to see if you have been approached with a scam, visit the Australian Government’s Scamwatch
A new study suggests that older adults find it harder to change their initial thoughts about someone’s trustworthiness after it has been violated, leaving them more susceptible to scams and deception.
Instead, researchers claimed they should focus on whether or not someone is acting in a way that really earns their trust or is instead harming them — to be wary of first impressions.
“We make these decisions about trustworthiness in a split second sometimes and that is an unreliable way to make good decisions in the long term,” said Marilyn Horta, PhD, a research scientist and first author of the new study.
“All of us, especially older adults, we need to really pay attention to how a person behaves rather than our initial perceptions of whether they look trustworthy or not.
Professor of Psychology Natalie Ebner, PhD, Horta and their collaborators published their findings in January in the journal Scientific Reports.
The new study on the psychology of trust and decision-maker was based on a simple gambling game where people must choose from a deck of cards that can gain or lose points with each card draw.
The more points they get, the more money they can make. However, the decks are stacked.
Some will lure you in with big payouts followed by even bigger losses, while the winning decks offer modest but more predictable gains.
These decks were paired with pictures of faces, some of which were rated trustworthy and others were considered untrustworthy. Most younger and retirement-age adults initially opted to choose cards represented by trustworthy faces.
However, when they started losing with the supposedly trustworthy cards, younger adults were much quicker to learn and try switching to another deck of cards in hopes of stemming their losses.
It took retirement-age and older adults most of the game before they started performing well, as they seemingly favoured their first impressions of trust, which obscured that the cards were bad.
The younger group had an average age in their early 20s, while the older cohort averaged between 70 and 75 years old.
“Often fraud happens through family members. If family members start acting untrustworthy, older adults are potentially not picking up on that change in behaviour as well,” University of Florida Professor Ebner said.
“They’re not adjusting to the new situation as much.
“One advantage we have in older age is the accumulation of life experience, but there might be situations where relying on previous experiences pushes us in the wrong direction and we make the wrong decision,” she added.
“We have to stay aware even if we think we know who we can trust.”
In 2023, Australians lost $476,778,116 to scams across an estimated 301,778 — with investment scams being the leading cause of financial losses.
For more information on how to protect yourself in retirement and report a scam, visit Scamwatch to learn more.
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