RECENTLY, A FELLOW—let’s call him Tom—contacted me with a distressing story of financial fraud. I’ll describe what happened then review steps you might take to prevent this same sort of thing. Tom first noticed there might be a problem when he spotted a larger-than-average withdrawal from his checking account. The payee was a 529 college savings plan. But because Tom and his wife—let’s call her Jane—have 529 accounts for their children, the transaction almost went unnoticed. Tom assumed it was a transfer into his own family’s account. But when he mentioned it to Jane, she noted that they had stopped contributing to their 529. That prompted them to investigate further. What they found was that scammers had set up a new 529 account in Tom’s name. They then initiated an electronic funds transfer to move more than $2,000 from Tom and Jane’s checking account into the new 529 set up by the thieves. The intention presumably was to then withdraw the funds from the 529, at which point the theft would become unrecoverable. How were the thieves able to initiate the transfer from Tom and Jane’s bank? This is the part that’s distressing: They took advantage of the widely-used Automated Clearing House (ACH) system. Unfortunately, this system has key weaknesses that make it susceptible to fraud like this. First, it allows funds to be “pulled” out of an account. That’s in contrast to a wire transfer, which can only be “pushed” out by someone with access to the account. So a thief would only need your name, account number and bank routing number to siphon funds from that account. And unfortunately, that information is printed on the front of every check, making it accessible to someone looking to perpetrate this type of scheme. Once the thief had the new 529 account set up in Tom’s name, it was just one simple step to initiate a transfer from Tom and Jane’s bank since the accountholder’s name was the same on both accounts. It was so seamless that if Tom hadn’t been reviewing the transactions in his account, he might never have noticed the theft. According to the FBI, losses due to cybercrime have increased from $1 billion per year to $21 billion over the past 10 years, and ACH theft is a tactic thieves are using more frequently, so it’s worth looking at strategies to help keep your accounts secure. Here are six recommendations.

1. Secure the login to your bank account by setting up two-factor authentication. And if your bank supports it, use an authenticator app, rather than text messages, for the authentication codes. Ideally, if your bank supports it, switch to a passkey. This is a newer technology that represents a significant advance over traditional passwords. Most importantly, they aren’t vulnerable to phishing attacks. They’re also easier to use, providing one-click logins, and you can store passkeys in a password manager. For those reasons, more websites are beginning to support passkeys. I’d make the switch as soon as your bank makes them available.
2. Set up alerts through your bank to monitor activity in your checking account. Every bank is different, but most allow you to set up email- or text-based alerts to let you know when transactions above a specified threshold are processed, or when other types of activity occur.
3. Monitor your transactions. These days, it can be hard to keep an eye on every account. Households often have one or more bank accounts plus credit cards and electronic payment services like Venmo or Zelle. Most people realistically don’t have the time to review every account in real time. That’s why I recommend a service like Monarch or YNAB, which are web-based versions of traditional budgeting tools like Quicken. These services can pull in transactions from all your accounts and present them in a consolidated list, making review much easier. If you kept Monarch or YNAB open in a browser window on your home computer, you could scroll through recent transactions whenever you have a spare minute.
4. To narrow the circle of people who have access to your account information, try limiting the number of paper checks you write. Especially with Zelle and Venmo as alternatives for making payments, this is getting easier. If you do write paper checks, be sure to use a gel pen and to avoid freestanding mailboxes. Those steps can help prevent a related type of fraud, as Jonathan Clements explained a few years back.
5. Pay attention to notifications of data breaches. Unfortunately, breach announcements seem to occur so frequently that we’ve become immune to them. It’s worth paying attention, though, to understand which particular pieces of information have been stolen. If it looks like your banking information is included in a breach, it might be worth opening a new account, inconvenient as that would be.
6. Have your guard up against unsolicited phone calls, emails or text messages. If someone is contacting you about an “account security issue,” or claims to be calling from your bank or from the IRS, be especially wary. Those are common tactics for creating a sense of urgency that can cause people to let their guard down.

What if, like Tom and Jane, you spot a fraudulent transaction in your account? Then it’s important to report it as quickly as possible. Regulation E can limit your liability, but the faster you report a suspicious transaction, the more protection it provides. Liability is limited to just $50 if a theft is reported within two business days, but that exposure increases to $500 if it’s reported later. And after 60 days, there are no guarantees. Thieves, unfortunately, don’t seem to sleep, which means that we need to be more vigilant than in the past, and need to be continuously vigilant. As personal finance author Mike Piper wrote recently, “Cybersecurity should be considered another core area of personal finance—no different from insurance planning, for instance.” Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.

DEEP DOWN INSIDE, I want to be the richest person in the graveyard.  I retired at age 62, confident in our financial plan to survive market fluctuations. We saved over 25% of our income for nearly three decades. Perhaps a bit too much, but we lived well and always had sufficient funds to raise a family, maintain our household, and put our children through postgraduate education. If anything, our retirement spending level is conservative, based on a 40 year time frame for both my wife and I. We have a slightly nuanced financial plan. Suffice to say it is reassuring to know that we are beyond financial security if we simply maintain an inflation adjusted 4% withdrawal rate. Indeed, calculations suggested we could double our pre-retirement budget, with no worries or loss of sleep. Risk be damned! Slowly, we made a conscious decision to spend more. At first it was tough to break old habits. I mean, frugality runs deep in my immediate family. You could use my brother and I as chromosomal templates in a genetic search to discover the frugality gene.  My wife and I now go out for coffee without blinking an eye at paying nearly 6 bucks for a cup of Joe (plus tip). We don’t hesitate to escape the Houston heat by scarfing 5 dollar a scoop ice cream. We no longer plan our restaurant outings according to Happy Hour schedules or local senior discounts.  Even so, three years into retirement, our annual spending remains well below what our financial plan says we can safely afford.  Time to up the ante. We bought season tickets to the symphony and added a dinner date before the performance. We took international vacations twice a year, exploring new countries and cultures. We drove to national parks and treated ourselves to overnights in hotels instead of motels. We gifted our children, with hopes they would bolster their own long-term savings. Gosh, we even made significant charitable gifts to institutions we only previously dreamed of supporting.  Spending is easy. Spending wisely is a challenge. Ironically, the strong stock market since our retirement has made it remarkably difficult to spend our money as initially planned. It sounds counter intuitive, but let me explain.  Our retirement portfolio allocation has a stock to bond ratio of 75:25.  The stock component primarily matches total market returns. Specifically, our stock component has grown more than 65% since we retired. Because of this, we put aside 10 years of safer funds (bonds and cash equivalents) to weather any potential market storm. We successfully navigated the immediate sequence of return risk (SORR) hurdle, that pesky danger of facing a poor investment market performance in earliest years of retirement.  We feel both blessed and safe. We sleep well at night. Our financial calculators now indicate that we can spend even more than original predictions. Yet that realization is causing me angst. After all, we spent a lifetime saving, scrimping and sacrificing to reach this point. Indeed, we value the concepts of avoiding excess, of seeking value and purpose in purchases. Our goals were never to impress the neighbors, but rather be content and grateful with what we have.   I want people to know I had a choice about how I spent my accumulated dollars. I chose a life of frugality, questioning everything I purchased. Do I really need that new phone? My current one makes calls, surfs the web, and navigates when I need directions.  Do I need a new car? My dented 11 year old Honda gets me safely to my destinations. Shall I purchase the kayak I’ve been eyeing, or simply rent one for the two times a year I brave the waters?  Perhaps the real measure of a successful retirement is not how much money remains at the end, but whether those resources were used in ways that enriched the lives of others and brought meaning to our own. Financial independence now gives us choices, and a freedom after decades of disciplined saving. It is okay if I leave this world with more than enough funds still in the bank. There are values I learned along the way; those of prudence, generosity, gratitude, and the quiet confidence that comes from living well below one's means. In the end, wealth is simply a tool; character is the true legacy. Perhaps the goal isn't to die with the largest portfolio, but to know that every dollar reflected the values by which we chose to live. Therefore, if I can’t spend it all according to my values, I guess I’m okay with being the one of the richest men in the graveyard.  Jeffrey K. Actor, PhD, was a professor at a major medical school in Houston for more than 25 years, serving as an academic researcher with interests in how immune responses function to fight pathogenic diseases. Jeff’s retirement goals are to write short science fiction stories, volunteer in the community and spend time in his garden. Check out his earlier articles.

MY RELATIONSHIP WITH money is complicated. I want to get the best value for our dollars, so I spend a lot of time comparison shopping. Other people hunt for bargains. I go on long safaris. My frugality and comparison shopping have served Jim and me well. In our double-income household, we managed to save 50% of our combined pay—basically living on one income and saving the rest. That, coupled with some lucky breaks, propelled us to early retirement. Going from saving for retirement to spending in retirement, however, brings with it a shift in mindset. You become less focused on getting the most from your dollars—and more focused on getting the most from your time. Yes, you still want to save money, but you need to balance that against the time and effort involved. That brings me to our retirement income plan. We have five years of living expenses in cash investments, so we can sleep at night without worrying about short-term stock market performance. But cash, of course, pays almost nothing these days, so I’m always looking for the best deal I can. Until recently, I conducted those searches from Spain, where we spent the first three years of our retirement until our recent move back to Dallas. To open new financial accounts in the U.S., we needed a U.S. address. To that end, like many expats, we rented a virtual mailbox. That gave us a physical address in the U.S., plus 24/7 access to our mail, all from the convenience of a laptop or smartphone. (This is different from a P.O. box from the postal service.) In the past few years, using our virtual mailbox address, I opened two new travel credit cards in the U.S. to earn mileage. That gave us enough promotional airline points to pay for roundtrip flights from Spain to both the U.S. and Thailand. I also used the address to open high-interest savings accounts with Customers Bank, Salem Five Bank and TIAA Bank. All this required relatively little time and effort—a few hours to search the internet and a few more hours to set up the new account and transfer the money electronically. Last November, however, I took the hunt for savings too far when I opened a Citi Priority checking account. Citi offered a $700 cash bonus for new customers if they maintained a balance of at least $50,000 for 60 days, equal to an annualized return of more than 8%. I transferred $1,000 to open the new Citi account and planned to transfer another $50,000 within 30 days. [xyz-ihs snippet="Mobile-Subscribe"] The bank’s account opening process was relatively easy and, as with all our other accounts, I used our virtual address. A few weeks later, I got an email from Citi saying it needed proof of my physical address and my identity. But without waiting for my response, Citi froze my account and sent it to “new account fraud.” After several phone calls with wait times that often lasted more than an hour, as well as text messages over several weeks, Citi admitted that it had caused the problem. It had violated the Patriot Act by opening my account without first validating my identity and address. I sent the bank a copy of my passport and driver’s license, along with a receipt showing that it was indeed me who paid for the virtual mailbox. But Citi still refused to unfreeze my account. After a few months of back and forth, I requested that Citi close my account and return my money the same way it had received it—by electronic bank transfer. Citi refused. A representative told me that Citi could only return the money by sending a check to a residential address and not to my virtual mailbox, even though I had provided proof that I owned the mailbox. I ended up filing complaints with the Office of the Comptroller of the Currency and with the Consumer Financial Protection Bureau. I finally got my initial deposit mailed to my virtual mailbox—seven months after I opened the account. My experience was hardly unique. I discovered many other Citi Priority customers had faced similar situations. Citi either froze or closed their accounts, and then refused to return their money or refused to deposit the $700 promo incentive. We all have limited time and money. I’m mad about the $700 I never got. But mostly, I’m mad about the time I’ll never get back. Jiab Wasserman, MBA, RICP®, has lived in Thailand, the U.S. and Spain. She spent the bulk of her career with financial services companies, eventually becoming vice president of credit risk management at Bank of America, before retiring in 2018. Head to Linktree to learn more about Jiab, and also check out her earlier articles. [xyz-ihs snippet="Donate"]