Tags: retirement | banking | mistakes

Don't Make These 3 Retirement Banking Mistakes

Don't Make These 3 Retirement Banking Mistakes
(Yukchong Kwan/Dreamstime)

By Monday, 28 September 2020 10:54 AM Current | Bio | Archive

It’s no surprise that people fear quitting their banks or credit unions; especially those with a long history of working together. However, as we age, our needs change, and if you’ve reached retirement age, it could be time to reassess where you do your banking.

In today’s competitive banking landscape, many banks and credit unions have exceptional offers that could save you money or make banking easier. Even though it may be difficult, sometimes change can be worth it. If you’re looking for the best banking deals in retirement, here’s what to consider.

1. Avoid Fees

It’s not just you, banking is getting expensive these days. In fact, data from the Center for Responsible Lending shows that banks collected $11.68 billion in overdraft fees alone from Americans in 2019. Overdraft fees aren’t the only costs you’ll need to watch out for, but ATM fees and even monthly account fees can erode your savings in retirement. If you’ve been banking at the same bank or credit union for a long time, you might not even notice fees that have slowly crept into your accounts.

Make sure you’re reviewing your checking and savings account statements each month for any bank fees. Don’t be shy to bring these fees up with your banker — you might be able to negotiate for a no-fee or low-fee account. If your current bank can’t reduce your fees, it might be time to go bank shopping. You can compare offers online to find the best accounts for your needs. Some banks offer accounts specifically for retirees with minimal fees, while other banks offer cash incentives for opening a new account.

2. Take Advantage of Mobile Banking

You might be used to going into your local branch to do your banking, but mobile banking is becoming increasingly commonplace. The Federal Reserve estimates that in 2017, about half of U.S. adults used their phones to access their bank accounts. Older adults aren’t excluded from this trend. A 2018 survey by the American Bankers Association found that 56% of adults 65 years and older preferred online banking. Chances are you still remember a time before cell phones, so the thought of banking from a device in the palm of your hand might be uncomfortable, but mobile banking offers many advantages for retirees.

If you’re in the early stages of retirement and planning to travel post COVID-19 or live elsewhere for part of the year, mobile banking can make it easier for you to take care of your finances when you’re on the go. Features such as mobile check deposits help you access your funds rapidly, from anywhere.

As your own mobility decreases, mobile banking can help you stay independent longer. This can become especially important if you have difficulties driving. With mobile banking, you don’t need to rely on anyone to take you to the bank — the majority can be done directly from your phone.

3. Prevent Financial Abuse

The U.S. Securities and Exchange Commission is increasingly concerned about elder financial abuse, estimating for every one case of elder financial abuse reported, 44 cases go unreported. While the official numbers are still a minority of the population — the World Health Organization estimates that elder financial abuse in the community is about 6.8%, with that number rising to 13.8% for elders in institutional settings — the unreported cases of financial abuse add up to an alarming number. Elder financial abuse is both widespread and costly, not just to individuals but to our society as a whole.

Age-friendly banking services that help adults remain independent for longer could help reduce financial abuse and should be a priority for you as you consider banking in retirement. Look for banks that have ADA accessibility, even when it comes to online banking, as websites that are hard to read could make online banking difficult for seniors with vision problems. Also, even though you might be adverse to new biometric features for account security, such as facial recognition, these features could reduce the number of passwords or security answers you need to provide — which can be important as you age.

Ask your bank whether they provide any dedicated staff to work with seniors and what training this staff has in spotting and preventing financial abuse. Many banks and credit unions do offer specific training in financial gerontology to their staff in addition to offering special features to seniors. For example, some banks have view-only account options so that seniors can add a family member who will help with their finances but has no direct control over their accounts.

Are You Thinking of Switching Banks?

Opening a new bank account can be intimidating. In addition to a whole new banking routine, there can also be a lot of paperwork and other formalities involved with finding a new bank. It can help to create a checklist for switching banks so that you don’t miss a step, especially when it comes to closing your old account or changing over any bills currently linked to your account.

Many banks offer switch kits to simplify the process. A switch kit helps you gather all your electronic banking data — mortgage and life insurance payments, savings plans and direct deposits, for example — onto one form so your new bank can seamlessly continue where your old bank left off. When comparing banks, be sure to ask whether they offer switch kits.

Jolene Latimer has her master's in Specialized Journalism from the University of Southern California. She writes about personal finance, marketing and sports.

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It's no surprise that people fear quitting their banks or credit unions; especially those with a long history of working together.
retirement, banking, mistakes
Monday, 28 September 2020 10:54 AM
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