The purpose of this post is to provide the reader with some tips on how to avoid investment scams.  Obviously, this list is not all-inclusive but it should get you to start thinking about what to shy away from with the goal of protecting your hard earned money. 

Be skeptical of “free lunch” seminars. Even if those events take place at or near the workplace, don’t assume that your employer is behind the event.  Also, it is important to remember the old adage that there is no such thing as a free lunch.  The presentor is spending his or hers money in an attempt to get your money. 

Have a retirement plan and try to stick to it.  It usually makes sense that as you approach retirement that the tried and true investment plan that you have followed for years, which has allowed you to accumulate your nest-egg, should not be thrown to the wind because you are being offered a sure thing that will allow you in a short period of time to double or triple your money.  There is no such investment vehicle. 

Know your current plan.  The federal government allows former employees and uniformed service members to leave personal and matching contributions that were paid into the Thrift Savings Plan (TSP) at in the TSP.  Before moving your TSP assets take time to understand the current plan.  Because of the extremely low costs associated with the TSP, you will likely find that staying put is a sound and less costly option.  The TSP also offers a life annuity option as one of the full withdrawal options available once you leave the Federal Government or uniformed services. This option provides guaranteed payments for as long as you live, or you may elect an annuity that pays benefits to a survivor or joint annuitant. Note that this annuity is separate from payments you may receive as part of the pension component of the Civil Service Retirement System (CSRS), Federal Employees Retirement System (FERS) or military pension. 

Before quitting and cashing out of your TSP, make sure you understand the tax consequences.   Remember that even if you avoid the 10 percent early withdrawal tax penalty, you won’t be able to spend every penny. Instead, you will have to pay ordinary income taxes on your withdrawals. Be sure to ask a tax professional about any other potential tax consequences of your decision.

Before making any decision about early retirement and accessing your nest-egg, you should consult a qualified professional to make sure that you will not suffer any unintended consequences.  This does not mean that you should consult someone that is trying to sell you something at a free-lunch seminar.  For example, depending on the laws in your state, cashing out of your retirement plan may mean that your creditors can collect against that payment you receive-even if you’re rolling the assets to a traditional IRA. 

Make sure that you consider the costs associated with fixed and variable annuities.  One of the big products that are pushed at the free lunch seminars are variable and fixed annuities.  Consequently, you should be aware that most variable and fixed annuities have sales charges, including asset-based sales charges or surrender charges. In addition, annuities may impose a variety of fees and expenses when you invest in them, including mortality and expense fees, administrative costs, and investment advisory fees. 

Make sure that you check the speaker’s credentials.  Find out whether the person offering you investments is registered with FINRA, which regulates brokers. Use FINRA BrokerCheck at If he or she is registered, be sure to check out any red flags raised by employment or disciplinary history. To check out an investment advisor, use the Securities and Exchange Commission’s Investment Adviser Public Disclosure website at or contact your state securities regulator at