Financing a comfortable retirement is one the biggest life issues facing most consumers—and yet most are ill-prepared and ill-equipped to deal with this challenge, says Mike Schenk, vice president of CUNA’s economics and statistics department.
“For many, saving for retirement isn’t even on their radar,” Schenk says. “Even those who are aware and concerned, the commitment they’ve made it pathetic: Only half of U.S. families have any kind of retirement account, and among those who do, the median amount is roughly $45,000.”
According to retiree health-care cost estimates, he adds, a 65-year-old couple retiring this year will need $220,000 to cover out-of-pocket medical expenses over a 20-year retirement. “Shocking, isn’t it?”
Schenk offered these insights during CUNA’s Pressing Economic Issues Series (PEIS) in May. This resource provides 30-minute updates each month on current economic issues and hot topics facing credit unions.
Schenk sees retirement planning as a huge opportunity for credit unions.
“For-profit financial institutions care more about high-balance, high-wealth retirement customers,” he says. “Our not-for-profit status means we’re more likely to be members’ trusted financial advisor, and to help them on the retirement front. Doing so successfully can mean cementing member relationships and creating loyalty in ways we historically have as go-to providers of advice and information about the car-buying process. That has been a real differentiator for credit unions.”
Credit unions currently hold about $80 billion in individual retirement account balances—nearly double the total from 10 years ago, according to CUNA statistics.
Click here for a condensed version of Schenk’s May 2014 PEIS discussion.
Bill Merrick is deputy editor of Credit Union Magazine. Follow him on Twitter via @CUMagazine.