Banks are missing out on a big selling point with the retired class. “Credit usage remains quite widespread after retirement, contrary to many consumers’ expectations,” a recent online survey by Synergistics Research Corp. concludes. Three-quarters of retirees with liquid assets of $100,000 or more “use credit to the same extent as they did when working full time, and are comfortable managing it,” according to Synergistics. “About one in seven retirees say the either do not use credit at all or use it much less. One-tenth are using credit more than they prefer, but find it necessary for some expenditures.” But half of those currently in the workforce “expect to use credit less one they retire.”
Synergistics COO and svp of research Genie Driskill believes that retirees’ behavior presents a “significant opportunity for depository institutions,” which have “seen a decline in assets they control” in that group. Retirees typically turn more to brokerages or mutual funds to manage their assets. “Depository institutions have to cement their relationships with Baby Boomers, emphasize their expertise in credit services,” adds Driskill. “Home equity lines are a good focus—retirees tend to be heavier users.”
Banks don’t put a “good deal of emphasis on retirement services. They’ve been emphasizing distribution channels. That’s important—retirees want a face-to-face experience. But institutions are not stressing the availability of credit. Their retirement programs don’t emphasize the credit relationship.” Banks could also make headway in rollovers, Driskill contends, even though a significant portion of that business in “based on workplace experience, often with mutual funds.”
