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Speaker Ignore boomers needs and CUs relevance erodes
HOLLYWOOD, Fla. (6/20/08)--To stay relevant, credit unions should care about and prepare for the surge of baby boomers converging on retirement, attendees of CUNA Mutual Group’s Discovery Conference were told Thursday.
Scott Knapp, CUNA Mutual Group’s vice president, retirement services and strategy, speaks about baby boomers’ retirement needs to Discovery Conference attendees Thursday in Hollywood, Fla. (Photo provided by CUNA Mutual Group)
“To not have a strategy for the largest generation in U.S. history will lead to erosion of a credit union’s relevance and economic viability,” said Scott Knapp, vice president, retirement services and strategy, CUNA Mutual. “This is a matter of importance that should be addressed at the highest level of the credit union.” Members nearing retirement are “scared to death” about not having enough money during retirement and that society has “over committed” to baby boomer retirement and won’t be able to deliver on many benefits, Knapp told Discovery Conference attendees. In a Gallup poll, 63% of baby boomers said they were concerned about not having enough money for retirement, and more than half were worried about not being able to pay for medical costs. The majority of people are not saving the right amount for retirement, he added. “That’s the easiest part of preparing for retirement, but few are getting it right. The hardest part is converting that accumulation of assets in order to sustain your retirement years. Building that plan is hard,” Knapp said. Credit unions need to step up and help members against some of the major retirement risks, including how to avoid outliving their money, taking out too much, needing money for health care and protecting against inflation, Knapp said. “Credit unions of all sizes need to play some role in helping those members through the difficult part. Position your credit union as a retirement resource center, providing investment, insurance and other services that address the retirement risk and management challenges,” Knapp said. “Adopt a comprehensive retirement strategy, communicate it to employees and train them to help members address their retirement needs,” he continued. “Partnering with a vendor to offer a product menu during your members’ pre-retirement years is a good way to address these challenges ahead of time.” Credit unions can grow membership by offering retirement planning services to their select employee groups (SEGs) before employees’ retirement, Knapp said. He also recommended offering 401(k) programs to those employers as a way to establish a long-term, sustainable relationship with the SEG. “A strategy to address your members’ retirement needs is crucial, or at retirement they will walk out of your branches forever,” Knapp said. “This is an issue that affects your capital investment strategy, marketing, distribution--and essentially the future of your credit union.”
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