While millennials have overtaken baby boomers as America’s largest generation, credit unions should not dismiss the more senior group’s impact and influence. According to a recent study, boomers control 70 percent of the nation’s disposable income. This is partly driven by accumulated income, but also by longer careers, meaning boomers will maintain enormous spending clout. In the next two decades, spending by Americans over age 50 is projected to increase by 58 percent whereas spending by Americans ages 25-50 will grow by 24 percent.
So how can credit unions continue to serve and delight their boomer members? By connecting them to the right products for their evolving financial needs.
Smart card options
When it comes to cultivating loyalty, no/low fee and cashback options are king. Sixty percent of boomers participate in cash back credit card rewards program, with only 36 percent using points programs. If your credit union doesn’t already a cashback program, consider implementing one. The benefit of this program is twofold – you have the opportunity to increase purchases made on your card, while reinforcing loyalty with a key generation. When using a credit card or opening a new account, the No. 1 feature boomers look for is a card with low or no annual fees. Providing members with this option is another avenue to effectively reach this generation.
Preparing for retirement is no simple task. The time, effort and planning that goes into it can be daunting, and many unknowns are ahead. Only 15 percent of boomers say they are “very confident” that they’ll have enough money to last through retirement. Not to mention, the generation underestimates the cost of post-retirement healthcare by 10 percent. Providing resources for continued retirement planning and asset management is a key opportunity for engaging with boomers, which is especially critical as their needs change and evolve. The current household savings in all retirement accounts among baby boomer workers is $147,000 (median) with half planning to continue working after retirement, mostly for income and health benefits. Proactively offering wealth-management resources to this group will not go unnoticed! This could be done by offering courses at your credit union or having retirement management experts on-site.
Millennials aren’t the only generation that appreciates advanced technology for their financial needs. Boomers are just as eager, with estimates of 40-70 percent regularly using a mobile banking app. Creating a seamless online and mobile experience for everyday financial needs should be a priority for your credit union as you engage boomers. As more boomers leave the workplace and lose the everyday connection to emerging technologies, it’s imperative to keep systems simple to use. In addition to matching mobile and online services, consider the use of mobile notifications to keep your credit union top of mind for boomers.