Jan 15 2015

Baby Boomers & Retirement Planning: Recent Trends and Future Implications for Credit Unions

The baby boomer generation is made up of more than 75 million Americans born between 1946 and 1964. Approximately 8,000 members of the baby boomer generation will turn 65 every day for the next few decades. There has been a renewed push over the last few years by financial institutions to target Gen-Y members, and rightfully so. After all, these are the members of tomorrow. However, what about the members of today? Credit unions should remain mindful that their older members should not be taken for granted especially as they transition into the next phase of their lives and rely less and less on everyday transactional services.

This presentation describes the approaches credit unions can take to become the ideal financial advisor for pre-retirees. We surveyed over 700 pre-retirees to get a better understanding of how consumers plan for retirement. About 20% of American adults aged 55 and over are open to or searching for a new financial advisor in the next 12 months for retirement planning. And 10.5% report that they are actively looking for a financial advisor to discuss retirement planning. 

Generally, baby boomers report using their credit unions less in retirement for a variety of reasons. These reasons include: 

  • Having primary relationships or retirement assets elsewhere 
  • Lack of convenience 
  • Relying on other sources for financial advice 
  • Narrow ranges of services at the credit union 

Moreover 39% of pre-retirees are very confident they will have enough money to take care of basic expenses during retirement, highlighting a significant opportunity credit unions have to assist. Retirees need services beyond loans and deposits. Your goal should be to target pre-retirees in a manner that will cater to individual needs. In that way, your credit union can help pre retirees increase their share of assets in credit-union related products. Help members build a diverse portfolio with an appropriate level of risk based on risk profiles. Never overlook the importance of educating boomers on retirement savings, expectations, and behaviors.

Filene thanks our generous supporters for making this research possible. 

Report Number 354