The Government Imposter Scam Draining Retirement Accounts: Why Older Adults Lost $2.4 Billion

A retired woman from Washington, DC believed she was assisting the FBI in catching a drug cartel. Over several months in 2023, she followed instructions from someone claiming to be a federal agent, eventually cashing out her entire 401(k). She lost more than $595,000 (£442,972) to what investigators later identified as a government imposter scam.

Her case exemplifies a crisis now affecting thousands of American retirees. According to the Federal Trade Commission's Protecting Older Consumers 2024-2025 report, adults aged 60 and over reported losing $2.4 billion (£1.78 billion) to fraud schemes in 2024. That figure represents a fourfold increase from $600 million (£447 million) in 2020.

Why Scammers Target Retirement Savings

Government imposter fraud has become the third-largest category of scams impacting older adults, with reported losses reaching $375 million (£279 million) — a 47% increase, according to FTC data.

These schemes specifically target retirement accounts because they constitute the largest pools of accessible wealth that seniors control. The FTC stated in its August 2025 Consumer Protection Data Spotlight that 'some people 60+ have reported emptying their bank accounts and even clearing out their 401(k)s.'

The surge in catastrophic losses is particularly concerning. Reports from older adults who lost $10,000 (£7,442) or more to imposter schemes increased more than fourfold from 2020 to 2024, rising from 1,790 to 8,269 reports. Total losses among those who lost over $100,000 (£74,426) soared eightfold during this period, climbing from $55 million (£40.93 million) to $445 million (£331.18 million).

The Anatomy of a Government Imposter Scam

These scams generally begin with a fabricated crisis. Scammers impersonate officials from agencies such as the Social Security Administration, the FTC, or law enforcement bodies like the FBI. They craft elaborate scenarios involving supposed identity theft, compromised accounts, or criminal investigations.

According to FTC data, victims are told that their money must be moved to 'protect' it. In reality, they are transferring funds directly to criminals. Some are instructed to withdraw cash, buy gold bars, or deposit money into Bitcoin ATMs.

Phone calls remain the most common and damaging contact method. In 2024, 41% of older adults who reported losing $10,000 or more said the scam began with a phone call. The median loss from phone-based scams was $2,210 (£1,644), significantly higher than other contact methods.

Payment methods also reveal the sophistication of these operations. Among high-loss victims, 33% paid via cryptocurrency, 20% via bank transfer, and 16% in cash.

How to Protect Your Retirement Savings in 2026

The FTC, Securities and Exchange Commission, and Social Security Administration are hosting a free webinar on 21 January 2026 to address these scams. In 2024 alone, Americans reported losing nearly $13 billion (£9.67 billion) to fraud, with imposter scams remaining the most reported category.

Federal agencies emphasise three key protective measures. Firstly, money should never be moved simply because someone claims it is safer that way. Genuine government offices will not instruct individuals to send cash via messengers or to convert savings into digital currency. When someone claiming to be a government official makes odd requests, cease communication and contact the agency directly using verified contact details from their official websites. It is also advised to discuss unusual demands with trusted relatives or friends, as fraudsters often insist that everything stay secret.

'The FTC is doing everything possible to protect older adults and shut down illegal scams,' said Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection.

The true extent of the toll remains difficult to quantify, as most fraud goes unreported. The FTC estimates that actual losses experienced by older adults in 2024 could range from $10.1 billion (£7.5 billion) to $81.5 billion (£60.6 billion).

Identity Theft Awareness Week runs from 26-30 January, with free resources available at ftc.gov/IDTheftWeek. Victims can also access personalised recovery plans at IdentityTheft.gov.

Identity Theft Awareness Week runs from 26-30 January, with free resources available at ftc.gov/IDTheftWeek. Victims can also access personalised recovery plans at IdentityTheft.gov.