SHELTON, Conn. — With 10,000 Baby Boomers turning 65 every day, CUs can drive growth by becoming the trusted financial partner for individuals heading into retirement.
John Gies, VP-Prudential Annuities, said credit unions must recognize this opportunity not only to help members get ready for their later years, but to also boost sales of their own products. Gies pointed out that the sale of Prudential variable annuities through CUs have more than doubled over the last year ($63.5 million to $190 million).
"Credit unions are in a unique position to become members' trusted advisor with regard to retirement," Gies said. "As we know, they have a level of trust with consumers that is much different than banks. We believe credit unions have the unique opportunity to do three things: understand the needs of these members who are now moving into retirement, educate them on what they need to know about retirement, and implement and roll out plans to do both."
Credit unions are working with members one-on-one and through retirement education seminars supported by Prudential. The messages are being paid attention to, Gies contended, due to tough realities new retirees face. "They face longevity issues as people are living longer. Costs are going up due to inflation and taxes. And then there is healthcare: Our research shows the average 65-year-old couple will spend $260,000 on healthcare through the remainder of their lives-about a 150% increase from 2000 to 2009."
The growth opportunity for credit unions, Gies has seen, has come from commission for sales on variable annuities, but more noticeably from members taking more financial services due to the credit union building stronger relationships. "Over the last few years we are seeing many more credit unions investing in resources to train and educate staff on how to work with retirees, and they are hiring managers dedicated to addressing the retiree market."