Encourage saving for retirement during America Saves Week 2017

America Saves Week 2017 kicks off February 27, 2017. With more Americans acknowledging a retirement savings shortfall, credit unions can help members save for retirement by encouraging members to set a goal, make a plan, and set up an automatic savings program.

The America Saves campaign, managed by the nonprofit Consumer Federation of America, will bring together thousands of organizations during America Saves Week 2017 to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth. And data from the “9th Annual America Saves Week Survey” shows that Americans need help to save, especially for retirement.

The survey found that only about half of nonretired survey respondents (52 percent) reported “saving enough for a retirement with a desirable standard of living.” This is down 3 percentage points from the previous year (55 percent) and a full 6 percentage points from 2008 (58 percent). That’s because many American workers are not saving for retirement. The Board of Governors of the Federal Reserve System’s “Report on the Economic Well-Being of U.S. Households in 2015” found that among survey participants, 31 percent of nonretired adults reported that they have no retirement savings or pension whatsoever. And only 27 percent of survey respondents reported that they have an IRA.

The America Saves Week survey also asked respondents for their views about participating in retirement plans and found that given the right plan features, most would contribute. Approximately 82 percent of survey respondents indicated that if offered a plan by their employer with an auto-escalation feature, they would contribute more than 3 percent of their salary and 40 percent of respondents indicated that they would contribute more than 10 percent of their salary. And if their employer did not offer a plan and they were automatically enrolled in an IRA administered by their state government with a 3 percent default contribution rate, 32 percent of respondents said they would contribute less than 3 percent, 31 percent said they would contribute at the 3 percent default rate, and 28 percent would contribute more than 3 percent.

The survey also found that those respondents with a plan that has specific goals tend to save more successfully than those respondents without a plan. More than half (55 percent) of respondents with a savings plan reported that they are making good or excellent saving progress compared to only 23 percent of respondents without a plan.

Credit unions can help their members save for retirement by participating in America Saves Week 2017, encouraging members to set a goal and make a retirement savings plan, and making savings automatic with a credit union IRA. Raising awareness is the first step, but getting members to set up an automatic savings plan is the key to a successful retirement savings plan. Following are tips to ensure success.

Promote the value of a low-cost credit union IRA. Year after year, studies show that credit unions charge lower fees and pay higher deposit rates than the competition. Many credit unions offer IRAs with no annual fees and low- or no-minimum balance requirements. This makes it easy for members to start saving for retirement without the worry of fees eroding their retirement savings.

Offer payroll deduction or automatic transfers to make saving for retirement easy. More important that saving for retirement is saving for retirement on a regular basis. Members often have trouble committing to save on a regular basis. To help members save on a regular basis, credit unions can offer payroll deduction or automatic transfers for making IRA contributions. Credit unions were early pioneers in using payroll deduction to promote the concept of “pay yourself first.” Making retirement savings automatic through the use of payroll deduction or automatic transfers will ensure that members continue to save for retirement regularly.

Promote direct deposit of tax refunds into IRAs. More than 40 million Americans get a tax refund each year and, according to IRS data, the average tax refund totaled $3,120 for the 2015 tax filing season. Members may not be aware that part or all of a tax refund can be deposited directly into an IRA, so be sure to promote direct deposit of tax refunds as an easy way to save for retirement.

Participate in America Saves Week 2017 and promote saving for retirement with a Traditional or Roth IRA. Credit unions that haven’t budgeted for an IRA promotion can take advantage of the free publicity that accompanies America Saves Week. For America Saves Week 2016, top media hits included NBC Today, Forbes, the Washington Post, and Bloomberg Business. The digital impact had a potential reach of 8.7 million with nearly 10,000 tagged tweets.

Credit unions that sign up to participate in America Saves Week 2017 will be recognized as a participating organization on the America Saves Week website and will gain access to flyers, posters, and payroll stuffers to promote saving. There are also logos and web graphics, sample press releases, articles, and slide presentations that credit unions can use to highlight their participation in America Saves Week and encourage members to save for retirement.

Credit unions have a long history of both helping their members save for retirement and participating in America Saves Week. The National Credit Union Administration, Idaho Credit Union League, and more than 90 credit unions have already signed up to participate in America Saves Week 2017. Last year, 19 credit unions were awarded the America Saves Designation of Savings Excellence from America Saves to recognize their efforts that went above and beyond to encourage people to save money during America Saves Week 2016. Credit unions that aren’t participating in America Saves Week 2017 still have time to sign up at www.americasavesweek.org  

Ascensus, as the largest independent retirement and college savings services provider in the United States, helps over 7 million Americans save for the future, and is proud to participate in America Saves Week 2017. We encourage our many credit union clients to join us in this event and help promote saving for retirement. It will benefit credit unions and their members.