With baby boomers entering retirement, credit unions may be losing that demographic's membership because boomers might be ready to handle their own money. Hendrix Niemann, managing director of wealth management for CUNA Brokerage Services Inc., recently spoke at CUNA's America's Credit Union Conference and said that thanks to members working longer and other demographic trends, credit unions will have to change how they assess their clients.
"Credit unions are facing major changes to their membership and their asset base," Niemann said. "Baby boomers are starting to enter retirement, which means their money will be leaving the credit union as they spend down what they have saved and invested for 30-40 years."
He went on to say that baby boomers may not be doing business with CUs because they are saving more. This will require credit unions to create a plan in order to replace these members and the assets they previously borrowed or deposited.
One demographic CUs could start to target is millennials. A recent study from the Transamerica Center for Retirement Studies reported that 70 percent of millennials are beginning to save for retirement through employer-sponsored plans or financial institutions outside the workplace. The report went on to say that the median age of the polled millennial group that start saving at is 22. Many millennials are starting to save for retirement so early because they would like to stop working by the age of 65 and have seen the financial hardship of previous generations. But the report stated that some members of this demographic still plan on working during their retirement.
A different report from Wells Fargo said that Generation Y is saving and looking for advice because they are stressed about their own financial picture. Thirty-nine percent of millennials said they feel overwhelmed about the amount of debt they have,