NAFCU Services Blog

Sep 26, 2019

Securing Longer-Term Deposits with IRAs

By Steve Christenson, Executive Vice President, Ascensus

As credit unions continue to seek ways to increase their member count and make capital available to those members, they often overlook a key source of longer-term deposits: IRAs. By taking a generational approach to the opportunities that IRAs provide, credit unions can expand their deposit base.


Millennial Approach

Millennials are good savers and are looking for financial services that they trust and that serve a worthwhile purpose. Credit unions can attract these younger savers by making educational modules about saving with an IRA available on their websites, as well as other outlets, like YouTube. And while millennials are likely to establish an account online, they are just as likely to visit a credit union branch directly, if inclined to do so. Credit unions should have a strong online new account set-up process, but also be prepared for in-person visits.

Drawing Board

Generation X Approach

Generation Xers, who have now entered their 50s, are facing new life changes. Their children are close to, or have already, headed off to college, so gen Xers are beginning to refocus on retirement. And they are finding out that their retirement savings is behind plan. This group may benefit from consolidating their retirement plan assets and developing a revised retirement strategy.

Gen Xers are also starting to face the loss of their parents. They may be inheriting their parents’ savings, including IRAs. Under current regulations, IRA beneficiary options can be confusing and gen Xers may not realize the potential value of keeping those assets in an inherited IRA. This type of information or guidance may not be readily available to gen Xers. They likely will have questions, prompting them to call or visit the credit union. Credit unions should be ready to answer their questions and walk generation X members through all of their options as IRA beneficiaries

Health Care

Baby Boomer Approach

Baby boomers are now reaching traditional retirement age (age 65) at a rate of 10,000 per day. This generation is either in retirement, partial retirement, or still fully employed. They are clearly focused on their specific retirement needs, both in terms of income and healthcare coverage.  They are looking for advice on rollovers from employer plans, ways to receive a stable monthly income, and someone to assist them with how to leave behind whatever remains to future generations. Credit union staff that recognize the baby boomer’s areas of focus and how an IRA can help them will be able to better address their concerns.

Trusted Advisor

Become a Trusted Source

Regardless of which generation they fall into, people will remain loyal to the financial organization that helped them create a successful outcome. The key is to become their trusted source for savings education and problem solving. By effectively assisting members with their IRA questions and offering savings solutions, a credit union can become an integral part of that successful outcome. This may lead to more deposits for a longer period of time, and, in turn, enable a credit union to assist an even larger circle of potential members on their road to success.

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