by Sara Donnersbach, Esq.
2011 marks the start of many in the baby boomer generation turning 65. Over 75 million Americans make up the baby boomer generation, and nearly all have reached an age where illness caring is starting to become a vital concern[1]. Many boomers have relied on services to help care for their parents, as well as plan for their own care. As a result, credit unions need to be in tune with this generation and their unique characteristics to ensure that they can properly serve these members’ varying needs.
Baby boomers will have a very different sort of retirement, though. The average life expectancy for baby boomers is 83 years and rising. The baby boomers who are turning 65 this year do not typically need a lot of support or care, and continue working, but as they get into their 70′s, the need will increase, and credit unions will need to be prepared. The idea of aging at home until nursing care becomes inevitable is no longer the only option. There are now eight distinct and custom tailored levels of senior care[2]:
- Senior centers
- Adult care centers
- In-home non-medical care
- In-home medical care
- Retirement and independent living communities
- Assisted living communities
- Skilled nursing homes
- Hospice care
Regardless of the changing living situation, wise credit union leaders recognize these changes, and are seeing an opportunity to introduce new products to members. The desired mission: Increase member participation by evaluating existing retirement programs to make certain proper products and services exist to meet these members’ needs. Be prepared to work with family members for things as simple as deposit accounts. A few examples, recognizing that each may not be available to every credit union:
- Personal Needs (PNA) accounts – for use if a member transitions to a skilled nursing care facility, where either a representative or a recipient of benefits is eligible for membership
- Direct deposit checking/savings accounts – for things like social security, widow’s benefits and pensions
- Joint accounts – with full survivorship rights for family members
- Transfer on Death (TOD) accounts – to pass to family members for estate planning purposes
- Guardianship accounts – for third party use, in conjunction with court appointment, where a guardian is responsible for spending the funds appropriately for the ward
- Representative Payee Accounts – set up to direct a third party to handle social security benefits of a member
Ensure that members are not charged fees that make establishing and maintaining accounts prohibitive. If a member issued a Power of Attorney, or becomes the ward of a Guardianship, be certain to retain copies of all documents that substantiate this change.
Marketing to the baby boomer population increases members and supports the growing concerns of that generation. Additionally, the Equal Credit Opportunity Act allows preferential rates to be offered to those ages 62 and older. With the biggest generation reaching retirement, and changing living circumstances, an aging population creates a golden opportunity.
Sara Donnersbach is a Partner in the Cleveland office where she manages the Governmental Collections, Healthcare Collections, Commercial Utility Collections and Landlord/Tenant Collections groups. She can be reached directly at 216.685.1039 or via email at sdonnersbach@weltman.com.
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[1] http://www.healthcorefaq.info/the-aging-baby-boomers-generation-create-jobs-in-health-care-industry/ The Aging Baby Boomers Generation Create Jobs in Health Care Industry
[2] Home Instead Senior Care’s white paper “Seniors and the Information Gap,” 2011.
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