Criminals are increasingly pilfering the retirement and other financial accounts of older Americans via so-called “imposter” scams, the Federal Trade Commission reported Thursday.

The frauds tend to go like this: Scammers conjure a fake crisis and pose as trustworthy sources — perhaps a representative for a bank or companies like Amazon, Apple or Microsoft, or workers at a federal agency like the Social Security Administration or FTC — who can supposedly help them fix it.

In the process, they persuade unsuspecting victims to transfer their money to “keep it safe” or for another bogus reason, the FTC said.

In 2024, the FTC received 8,269 reports from adults age 60 and older, claiming to have lost at least $10,000 to an imposter scam. That figure is up 362% from 1,790 reports in 2020, according to FTC data.

Total losses among older Americans amounted to $700 million in 2024 — a more than fivefold increase from $122 million in 2020, the FTC said.

Sometimes, financial loss amounts to households’ entire life savings.

“Some people 60+ have reported emptying their bank accounts and even clearing out their 401ks,” the FTC wrote.

Losses among those older adults who lost at least $100,000 have swelled to $445 million in 2024 from $55 million in 2020, according to the FTC.

The increase in imposter scams tracks an increase in overall elder fraud reported by the Federal Bureau of Investigation.

Internet crime led to $4.9 billion in losses from 147,127 consumer complaints in 2024. Those figures represent a 43% increase in losses, and a 46% jump in complaints from 2023, according to the FBI’s Internet Crime Complaint Center.

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“The reported losses are most likely much higher because older Americans are less likely to report fraud because they either don’t know how to report it, are embarrassed, or don’t know they have been scammed,” the FBI wrote in June.

Losses over $100,000 were three times as likely to be reported by adults 60 years and older compared with younger households, according to the FTC’s 2024 data.

Here are a few ways the FTC suggests to avoid falling victim to imposter scams:

• Don’t move money to “protect” it. Never transfer or send money, cryptocurrency or gold to anyone you don’t know — no matter who they say they are — in response to an unexpected call or message, the FTC said.

• Don’t believe people who say to quickly move your money to “protect” it. Anyone who tells you that is a scammer, the agency said.

• Hang up and verify. Even if the scams start online, they generally still rely on phone calls at some point in the process. Contact the company or government agency in question using a phone number, website or email address you know is real. “Don’t trust what an unexpected caller says, and never use the phone number in a computer security pop-up or an unexpected text or email,” according to the FTC.

• Block unwanted calls. Learn about call blocking options through your carrier that can stop scammers before they reach you.

Setting aside money in a rainy-day fund can bolster households’ retirement prospects down the road, especially for hourly workers with inconsistent income streams, experts said.

Emergency funds are a “security blanket,” said Fiona Greig, global head of investor research and policy at Vanguard Group, an asset manager.

That’s because they offer a cash buffer for people who might otherwise raid their 401(k) accounts to pay for unforeseen expenses in the short term, she said.

401(k) investors with at least $2,000 of emergency savings are less likely than those without rainy-day funds to tap their retirement plans early, according to new Vanguard research.

Specifically, they are 19 percentage points less likely to take a 401(k) loan and 17 points less likely to withdraw 401(k) funds for a financial hardship, Vanguard found.

Leaving a job is another trigger that allows workers to access their 401(k) savings before retirement age. Job-switchers who have emergency funds are 43 percentage points less likely to cash out their 401(k) accounts than those without, according to Vanguard.

“Emergency savings protect retirement savings,” Greig said.

Retirement savers with emergency funds also save a greater share of their incomes — 2.2 percentage points more — in a 401(k) relative to those without them, Vanguard found.  

Policymakers view so-called “leakage” from 401(k) plans — especially cash-outs — as a big impediment to retirement security.

Withdrawing 401(k) assets early generally comes with tax penalties and shortchanges investors, who forgo years of investment earnings on withdrawn funds, experts said.

There would be roughly $2 trillion of additional savings in 401(k) plans over a 40-year period if workers didn’t prematurely cash out their accounts, the Employee Benefit Research Institute estimated in a 2019 paper.

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Leakage is an especially large concern for hourly workers, Vanguard’s Greig said.

Hourly workers are less likely to have emergency funds and more likely than salaried employees to tap their 401(k) savings early, Greig said.

(That’s not just because hourly workers also tend to be lower earners, she said. The trend persists even when comparing hourly and salaried workers with similar incomes, according to Vanguard’s research.)

Hourly workers have more volatile incomes, Greig said. Without an emergency buffer, they may need to tap their 401(k) if cash flow decreases unexpectedly, she said.

Building a $1 million nest egg may seem an impossible feat.

However, amassing such retirement wealth is within reach for almost anyone — provided they take certain steps, financial advisors say.

“You might think that, ‘Well, I have to become a Silicon Valley entrepreneur to become rich,'” said Brad Klontz, a financial psychologist and certified financial planner.

In fact, you can be a fast-food worker your whole life and amass wealth, said Klontz, a member of the CNBC Financial Advisor Council and the CNBC Global Financial Wellness Advisory Board.

The calculus is simple, he said.

Every time you’re paid a dollar, save and invest a percentage toward your “financial freedom,” Klontz said.

With this mindset, “you can work almost any job and retire a millionaire,” he said.

Saving $1 million may sound like a “Herculean task” but it “might not be as hard as you think,” Karen Wallace, a CFP and former director of investor education at Morningstar, wrote in 2021.

The key is to start saving early, perhaps in a 401(k) plan, individual retirement account or taxable brokerage account, experts said. This allows investors to harness the magic of compound interest over decades. In other words, you “let your investments do as much heavy lifting as possible,” Wallace wrote.

About 79% of American millionaires say their net worth was “self-made,” according to a Northwestern Mutual poll published in September. Just 11% said they inherited their wealth, while 6% got it from a windfall event like winning the lottery, according to the survey of 4,588 U.S. adults, fielded from Jan. 3 to Jan. 17, 2024.

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There were 544,000 Americans with 401(k) balances of more than $1 million as of Sept. 30, according to Fidelity Investments, which is the largest administrator of workplace retirement plans. There were also more than 418,000 IRA millionaires.

In fact, the number of 401(k) millionaires grew by 9.5%, or 47,000 people, between the second and third quarter of 2024, largely due to stock-market gains.

Of course, $1 million in retirement may not be the right amount for everyone.

An oft-cited rule of thumb — known as the 4% rule — indicates a typical retiree can draw about $40,000 a year from a $1 million nest egg in order to safely assume they won’t run out of money in retirement. (That annual withdrawal is adjusted annually for inflation.)

For many, this sum would be supplemented by Social Security.

Fidelity suggests a savings goal based on income. For example, by age 67 a worker should aim to have saved 10 times their annual salary to ensure for a comfortable retirement.

Ideally, households would aim to save 15% to 20% of their income, Sun said. This is a rule of thumb often cited by financial planners.

How much wealth you want — and how quickly you want to be rich — will determine the percentage, Klontz said.

He’s personally aimed for a 30% savings rate, but knows people who’ve shot for close to 90%. Saving such large chunks of one’s income is a common thread of the so-called FIRE movement, which stands for Financial Independence, Retire Early.

How do they do it?

“They didn’t move out of their parents’ house, they minimized everything, they don’t buy new clothes, they take the bus, they shave their head instead of paying for haircuts,” Klontz said. “There’s all sorts of hacks you can do if you want to get there faster.”

The U.S. retirement system doesn’t get high marks relative to other nations.

In fact, the U.S. got a C+ grade and ranked No. 29 out of 48 global pension systems in 2024, according to the annual Mercer CFA Institute Global Pension Index, released Tuesday. It analyzed both public and private sources of retirement funds, like Social Security and 401(k) plans.

A similar index compiled by Natixis Investment Management puts the U.S. at No. 22 out of 44 nations this year. Its position has declined from a decade ago, when it ranked No. 18.

“I think [a C+ grade] would describe a rating where there is a lot of room for improvement,” said Christine Mahoney, global retirement leader at Mercer, a consulting firm.

The Netherlands placed No. 1, followed by Iceland, Denmark and Israel, respectively, which all received “A” grades, according to Mercer. Singapore, Australia, Finland and Norway got a B+.

Fourteen nations — Chile, Sweden, the United Kingdom, Switzerland, Uruguay, New Zealand, Belgium, Mexico, Canada, Ireland, France, Germany, Croatia and Portugal — got a B.

Of course, retirement systems differ since they address a nation’s unique economies, social and cultural norms, politics and history, according to the Mercer report. However, there are certain traits that can generally determine how well older citizens fare financially, the report found.

The U.S. system is often referred to as a three-legged stool, consisting of Social Security, workplace retirement plans and individual savings.

The lackluster standing by the U.S. in the world is largely due to a sizable gap in the share of people who have access to a workplace retirement plan, and for the ample opportunities for “leakage” of savings from accounts before retirement, Mahoney said.

Employers aren’t required to offer a retirement plan like a pension or 401(k) plan to workers. About 72% of workers in the private sector had access to one in March 2024, and about half (53%) participated, according to the U.S. Bureau of Labor Statistics.  

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“The people who have [a plan], it’s probably pretty good on average, but you have a lot of people who have nothing,” Mahoney said.

By contrast, some of the highest-ranked countries like the Netherlands “cover essentially all workers in the country,” said Graham Pearce, Mercer’s global defined benefit segment leader.

Additionally, top-rated nations generally have greater restrictions relative to the U.S. on how much cash citizens can withdraw before retirement, Pearce explained.

American workers can withdraw their 401(k) savings when they switch jobs, for example.

About 40% of workers who leave a job cash out “prematurely” each year, according to the Employee Benefit Research Institute. A separate academic study from 2022 examined more than 160,000 U.S. employees who left their jobs from 2014 to 2016, and found that about 41% cashed out at least some of their 401(k) — and 85% completely drained their balance.

Employers are also legally allowed to cash out small 401(k) balances and send workers a check.

While the U.S. might offer more flexibility to people who need to tap their funds in case of emergencies, for example, this so-called leakage also reduces the amount of savings they have available in old age, experts said.

“If you’re someone who moves through jobs, has low savings rates and leakage, it makes it difficult to build your own retirement nest egg,” said David Blanchett, head of retirement research at PGIM, Prudential’s investment management arm.

Social Security is considered a major income source for most older Americans, providing the majority of their retirement income for a significant portion of the population over 65 years old.

To that point, about nine out of 10 people aged 65 and older were receiving a Social Security benefit as of June 30, according to the Social Security Administration.

Social Security benefits are generally tied to a worker’s wage and work history, Blanchett said. For example, the amount is pegged to a worker’s 35-highest years of pay.

While benefits are progressive, meaning lower earners generally replace a bigger share of their pre-retirement paychecks than higher earners, Social Security’s minimum benefit is lesser than other nations, like those in Scandinavia, with public retirement programs, Blanchett said.

“It’s less of a safety net,” he said.

“There’s something to be said that, as a public pension benefit, increasing the minimum benefit for all retirees would strengthen the retirement resiliency for all Americans,” Blanchett said.

That said, policymakers are trying to resolve some of these issues.

For example, 17 states have established so-called auto-IRA programs in a bid to close the coverage gap, according to the Georgetown University Center for Retirement Initiatives.

These programs generally require employers who don’t offer a workplace retirement plan to automatically enroll workers into the state plan and facilitate payroll deduction.

A recent federal law known as Secure 2.0 also expanded aspects of the retirement system. For example, it made more part-time workers eligible to participate in a 401(k) and raised the dollar threshold for employers to cash out balances for departing workers.

There are few certainties when it comes to investing.

The stock market can seem to gyrate with little rhyme or reason, guided up or down by unpredictable news cycles and fickle investor sentiment. Average stock returns have historically trended up over long time periods, but their trajectory is hardly assured on a daily, monthly or annual basis. As the common investment disclosure goes, “Past performance is no guarantee of future results.”

Yet, according to financial advisors, there is an outlier in the realm of investing: the 401(k) match.

The basic concept of a 401(k) match is that an employer will make a matching contribution on workers’ retirement savings, up to a cap. Advisors often refer to a match as free money.

For example, if a worker contributes 3% or more of their annual salary to a 401(k) plan, the employer might add another 3% to the worker’s account.

In this example — a dollar-for-dollar match up to 3% — the investor would be doubling their money, the equivalent of a 100% profit.

A match is “one of the rare guarantees on an investment that we have,” said Kamila Elliott, a certified financial planner and co-founder of Collective Wealth Partners, based in Atlanta.

“If you were in Vegas and every time you put $1 in [the slot machine] you got $2 out, you’d probably be sitting at that slot machine for a mighty long time,” said Elliott, a member of CNBC’s Advisor Council.

However, that money can come with certain requirements like a minimum worker tenure, more formally known as a “vesting” schedule.

The most common formula is a 50-cent match for every dollar a worker contributes, up to 6%, according to the PSCA. In other words, a worker who saves 6% of their pay would get another 3% in the form of a company match, for a total of 9% in their 401(k).

“Where else can you get a guaranteed return of more than 50% on an investment? Nowhere,” according to Vanguard, a 401(k) administrator and money manager.

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Consider this example of the value of an employer match, from financial firm Empower: Let’s say there are two workers, each with a $65,000 annual salary and eligible for a dollar-for-dollar employer 401(k) match up to 5% of pay.

One contributes 2% to their 401(k), qualifying them for a partial match, while the other saves 5% and gets the full match. The former worker would have saved roughly $433,000 after 40 years. The latter would have a nest egg of about $1.1 million. (This example assumes a 6% average annual investment return.)

Financial advisors generally recommend people who have access to a 401(k) aim to save at least 15% of their annual salary, factoring in both worker and company contributions.