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In the News

White House Conference on Aging issues advisory on pension advances

Monday, March 23, 2015
Source: 2015 White House Conference on Aging blog

The White House Conference on Aging website is warning older adults to avoid pension advance traps and offered three tips to protect one’s retirement pension.

Retirees who are facing financial challenges should be wary of pension payment advance programs that can seem like a quick fix to their financial problems, stated a blog post from the website. Such programs can reduce retirement incomes because their repayment includes the advance plus interest and fees.

Often pension advances are cash advances in exchange for a portion, or all, of one’s future pension payments, stated the website. Companies that offer pension advances typically charge high interest rates and fees and often target government retirees with pensions.

The White House Conference on Aging website offered the following ways to protect one’s retirement pension:

  • Avoid loans with high fees and interest. Pension advance companies may not always advertise their fees and interest rates, but you will certainly feel them in your bottom line. Before you sign anything, learn what you are getting and how much you are giving up.
  • Don’t sign over control of your benefits. Companies sometimes arrange for monthly payments to be automatically deposited in a newly created bank account so the company can withdraw payments, fees and interest charges from the account. This leaves you with little control.
  • Don’t buy life insurance that you don’t want or need. Pension advance companies sometimes require consumers to sign up for life insurance with the company as the consumer’s beneficiary. If you sign up for life insurance with the pension advance company as your beneficiary, you could end up footing the bill, whether you know it or not.

> Read more about the 2015 White House Conference on Aging consumer advisory.
> Discover the Area Agency on Aging of the Capital Area.

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