Promote saving for retirement during America Saves Week 2016
America Saves Week 2016 kicks off February 22, 2016, and this year’s theme, “Making Savings Automatic,” is tailor made for credit unions to promote saving for retirement.
The America Saves campaign, managed by the nonprofit Consumer Federation of America, will bring together thousands of organizations during America Saves Week 2016 to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth. And recent data shows that Americans need help to save, especially for retirement.
About half of households age 55 and older have no retirement savings—such as a 401(k) plan or IRA—according to an analysis of the 2013 Survey of Consumer Finances by the Government Accountability Office. And, nearly one in four participants in the Employee Benefits Research Institute’s 2015 Retirement Confidence Survey reported that they are not at all confident about having enough money for a comfortable retirement.
That’s because many American workers are not saving for retirement. The U.S. Department of Labor reported that in 2012, the most recent year for which data is available, 30 percent of private industry workers with access to a defined contribution plan at their workplace did not contribute to the plan. What’s more, an Investment Company Institute study found that only 15 percent of U.S. households contributed to any type of IRA in tax year 2012, and very few eligible households made catch-up contributions to Traditional or Roth IRAs.
Ways to Help Members Save
Credit unions can help their members save for retirement by participating in America Saves Week 2016 and by “making savings automatic” with a credit union IRA. Following are tips to ensure success.
Low-Cost IRA
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 get started saving for retirement without the worry of fees eroding their retirement savings.
Payroll Deduction
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, but members often have trouble keeping the commitment to save on a regular basis. In keeping with the theme of “Making Savings Automatic,” 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 on a regular basis.
Incentives
Offer incentives to encourage IRA contributions. Consider waiving the required opening balance for new IRAs funded with payroll deduction contributions or offer special interest rates for IRAs opened during the promotion period. Credit unions also can offer gifts or bonus incentives to members for opening new IRAs or contributing to existing IRAs—as long as they follow IRS guidelines to ensure that the incentive does not create a prohibited transaction.
Publicity
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 2015, 14 national newspapers, 51 regional newspapers, and 75 blogs covered America Saves Week with combined impressions of 16,734,580. Top media hits included USA Today, NBC Nightly News, CBS News, and the Washington Post.
Marketing
Credit unions that sign up to participate in America Saves Week 2016 will be recognized as a participating organization on the America Saves Week website and will gain access to a helpful toolkit with flyers, posters, and payroll stuffers to promote savings. There are also logos and web graphics, sample press releases, articles, and presentations that credit unions can use to highlight their participation in America Saves Week and encourage members to save for retirement.
Continue the History of Helping Save
Credit unions have a long history of both helping their members save for retirement and participating in America Saves Week. The National Credit Union Foundation is a financial sponsor of America Saves, and the National Credit Union Administration, Credit Union National Association, and more than 70 credit unions have signed up to participate in America Saves Week 2016. Last year, nine 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 2015.
Ascensus®, as the largest independent retirement and college savings services provider in the United States, helps over 6 million Americans save for the future, and is proud to participate in America Saves Week 2016. Ascensus encourages its many credit union clients that haven’t already done so, to join in promoting saving for retirement by signing up for America Saves Week 2016 at www.americasavesweek.org. Participating credit unions will not only help their members save, but help their credit unions.
