San Francisco Baby Boomers Count Down to Retirement.
WASHINGTON, D.C. -- As America's oldest baby boomers start counting down to retirement, a new government survey shows they are on the upswing in terms of financial savvy -- nearly twice as likely as today's seniors to bank and pay bills online. Yet despite their financial sophistication, one in four boomers nationwide still gets paid with old-fashioned paper checks, a trend that's particularly entrenched with those closest to retirement age (51-60 years old).
In San Francisco, technology-adept baby boomers are even more apt to use online banking than the national average, but one in five nevertheless still receives wages, salary or other regular payment by checks, rather than direct deposit.
The national survey, sponsored by the U.S. Department of the Treasury and Federal Reserve Banks on behalf of the Go Direct campaign, coincides with a yearlong "Countdown to Retirement" pledge drive to encourage baby boomers preparing to head into retirement to choose direct deposit once they start collecting Social Security benefits.
"Direct deposit is a long-standing priority for Treasury, because it's safer and easier for consumers than paper checks," said Treasury Fiscal Assistant Secretary Donald Hammond. "With the anticipated surge in baby boomer retirements in the coming years, we must encourage Social Security recipients to sign up for direct deposit. There are significant benefits, in terms of safety and security, for the recipients and considerable cost savings for American taxpayers," Hammond said.
Boomers gearing up for retirement urged to use direct deposit
One year from now, the oldest of America's 77 million baby boomers - born between 1946 and 1964 - will turn 62, becoming eligible for Social Security retirement benefits. Go Direct, a national campaign aimed at increasing direct deposit use among existing Social Security recipients, works with national and local partners across the country to convert check payments to direct deposit.
"At Social Security we urge everyone to receive their benefits through direct deposit," said Leslie Walker, Regional Communications Director for Social Security. "Direct deposit is safe, convenient and secure."
Boomers self-assured heading into retirement
The poll showed that in many ways, boomers are confident going into their retirement, with San Francisco results somewhat similar to national trends.
* While current indicators show the national savings rate is declining, the poll showed that only 16 percent of baby boomers nationwide say all or most of their future retirement income will come from Social Security. In comparison, twice as many (31 percent) existing retirees say Social Security makes up all or most of their income. (In San Francisco, 11 percent of boomers vs. 13 percent of existing retirees.)
* Boomers also say they are more likely to wait to collect their Social Security retirement benefits. About one in seven (16 percent) boomers who are not yet retired plans to start collecting Social Security at age 62, compared to a third (34 percent) of current retirees who started collecting benefits at that age. (San Francisco boomers are even more likely to wait to retire than the national average. Only six percent said they plan to collect Social Security at age 62, compared to 26 percent of current retirees, and fully three out of four San Francisco boomers say they will wait until age 65 or higher.)
* Seventy percent of boomers who are not yet retired plan to pay greater attention to controlling their personal finances when they do retire, compared with 64 percent of today's retirees. (In San Francisco, 70 percent of boomers vs. 59 percent of current retirees.)
Mixed results for financial know-how
The poll also showed that nearly half (47 percent) of all boomers nationwide who have bank accounts use online banking, virtually the same as younger respondents (48 percent) and nearly double the number of people age 61 or older (24 percent).
In San Francisco, boomers' comfort level with technology is even more pronounced, with 59 percent of boomers using online banking, compared to 26 percent of people age 61 and older.
However, a major exception is direct deposit, where boomers significantly lag older respondents. Twenty-five percent of boomers nationwide say they receive their wages, salary or other regular payments by paper checks, compared with just 13 percent of respondents age 61 or older. In addition, 40 percent of baby boomers who are unlikely to start using direct deposit in the next year say they don't trust or like direct deposit for a variety of reasons. (In San Francisco, 20 percent of boomers get paid with paper checks, vs. 11 percent of people age 61 and older, twice as many.)
Yet even within the baby boomer population, there are disparities. The survey found that while nearly all boomers say they have a checking or savings account (94 percent), older boomers (ages 51-60) lag younger ones (ages 42-50) in moving into the electronic age. Older boomers fall behind younger baby boomers in use of online banking (36 percent to 56 percent). In addition, older boomers are less likely to enroll in direct deposit within the next year, compared to boomers overall (18 percent to 30 percent).
To help people currently receiving Social Security and other federal benefits sign up for direct deposit of their federal benefits, Go Direct offers a toll-free number, (800) 333-1795 and two Web sites, www.GoDirect.org (English) and www.DirectoASuCuenta.org (Spanish).
Baby boomers who are interested in taking the Countdown to Retirement pledge and learning how their attitudes about retirement compare with the national average can visit the Go Direct Web site and click on Countdown to Retirement.
National results are from a nationally representative telephone survey of 1,003 adults, age 18 and over, conducted October 23-November 12, 2006, by KRC Research. The margin of error for the overall study is +/- 3.1 percent at the 95 percent confidence level.
San Francisco results are from a telephone survey of 402 adults, age 18 and over, residing in the San Francisco DMA. The survey was conducted October 23-November 12, 2006, by KRC Research. The margin of error for the overall study is +/- 4.9 percent at the 95 percent confidence level.
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|Date:||Jan 3, 2007|
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