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Retirees need to keep a close eye on their money. After a lifetime of working, typically they shift gears into a fixed income that is some configuration of Social Security, benefits from their job and savings acquired over the years. That means there is money in the bank they can use for living expenses now that they are not working.
However, a bank isn’t just a place to store funds and withdraw them when needed. In fact, most major banks and local branches offer services that lots of retirees do not take advantage of. Some institutions, like Bank of America, even offer tailor-made services in the form of elder financial care.
Here are five banking services that retirees should be using.
Online Banking and Mobile Apps
For many generations, banking via the internet is commonplace. But for many retirees who are from the baby boomer generation, it can still feel alienating and unsecure. Lori Gravitt, an assistant vice president and branch manager at Addition Financial Credit Union, tries to ease retirees’ concerns when it comes to online banking.
“Often here at Addition … I see retirees avoiding certain banking services they should be using. Many don’t want anything to do with online baking. There is a lot of fear around online identity theft and a lack of their own IT skills,” Gravitt said.“I try to ease this fear by explaining that online banking [is] normally safe and not easy at all to hack. I help members by recommending strong passwords, user IDs that are not easily guessed and having secure Wi-Fi networks wherever they login.”
Debit Cards
Cash might always be accepted and credit cards might be for emergencies, but debit cards are definitely the outlier when it comes to retirees’ banking habits.
“Debit cards are another banking service they tend to avoid,” Gravitt said.“Retirees like to have cash in their hand or simply write checks.”
However, Gravitt tries to encourage retirees to consider debit as an alternative. “I can often ease their concerns around debit cards by explaining cash is not replaceable if lost and when you write a check you are providing all the necessary information on a check to be fraudulent,” she said.
Direct Deposit
Lots of working people have set up a direct deposit with their employer so that on payday, their earnings go right into their bank accounts. No need to drive to the local branch and deposit the check in person.
On the other hand, retirees, many of whom stepped out of the job force before direct deposit became common practice, are hesitant to use it now with the income they are receiving on a regular basis.
“Some retirees still avoid direct deposit — they don’t want to give up control,” Gravitt noted. “If they have the check and come to the bank, they can cash it. To them, cash is king.”
According to Gravitt, retirees fear entrusting their funds to a computer. “The possibility of a computer messing and their funds not being in their account is a real fear,” Gravitt said. “Direct deposit comes with many benefits, such as avoiding the bank, funds are in your account faster, checks can possibly have holds placed on them or not available right away.”
Automated Clearing House
Automated clearing house, otherwise known as ACH, is an organized system of payment via an electronic network. ACHs move trillions of dollars each year from one bank to another. If you have participants for online bill pay or another service, such as direct deposit, you have used an ACH and probably didn’t know it. Retirees are hesitant with ACHs, particularly when it comes to ACHs coming out of their accounts, as Gravitt has seen from experience.
“This is an electronic network for processing transactions,” Gravitt explained. “They don’t like to provide their account numbers to other parties, which is a requirement for the ACH process. They still like to sit down, open their bills and send out payments on their own.”
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But the benefits of ACH shouldn’t be avoided, especially by retirees. “ACH provides a way to have their bills paid on time, not lost in the mail, and some companies prefer this method for payment,” Gravitt said.
Electronic Statements
According to Gravitt, electronic statements services is another area retirees tend to avoid because, again, they don’t prefer online banking.
“They don’t want to get their statements online,” Gravitt said. “They still enjoy and trust getting their statements in the mail. Many still sit down and balance their checkbooks with their paper statements. We explain it is safer online and often they can access years in the past. This way they can avoid having piles of statements at home which could be stolen or lost.”
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