Maya Abood, California Coalition for Rural Housing and Robert Zdenek, National Community Reinvestment Coalition
A “silver tsunami” is coming; an estimated 95 million people will be over the age of 65 in the U.S. in the year 2060, comparable to the current population of California, New York, Pennsylvania, and Texas combined. In anticipation, some financial institutions and community organizations across the country are partnering to develop age-friendly banking products and services that better protect and preserve the assets of an aging population. In order to examine the unique financial needs and increase the economic well-being of low-income older adults, the California Coalition for Rural Housing (CCRH) partnered with the National Community Reinvestment Coalition (NCRC) to conduct an intensive study of over 400 low-income tenants living in subsidized senior housing in California. Read about our findings and recommendations in this newly published working paper.
Here is what we found:
Older adults need low-cost, low-fee checking accounts: According to our survey, nearly 90 percent of older adults had checking accounts, although that number was significantly lower for monolingual Spanish speakers and extremely low-income survey participants. Participants of all income levels expressed confusion over bank fees and minimum balance requirements and were unsure if they qualified for waivers.
Older adults need low-interest lending products for emergency use: Only 27 percent of survey respondents used savings accounts and only 42 percent said they had sufficient financial resources to support themselves for three months or more. Yet despite limited resources, most older adults said they did not use credit cards or payday loans, often citing high fees and interest rates as the main deterrent. Focus group participants said they would like access to a credit card with a maximum balance of $1,000 and an interest rate below five percent for emergency use.
Older adults need assistance accessing public benefits: Older adults in the survey and focus groups expressed confusion over the newer Social Security Go Direct® program, voiced concerns about the social security representative payee systems, and were less likely to access income support programs like CalFresh/Supplemental Nutrition Assistance Program (SNAP).
Older adults are concerned about financial abuse and fraud: Most older adults who participated in the focus groups knew at least one person who had been scammed or fallen victim to financial fraud. Participants said banks should conduct educational workshops, partner with legal clinics to assist older adults with wills and trusts, and developing bank protocols to recognize and report financial abuse.
Older adults prefer direct customer service: Older adults in the focus groups expressed reluctance to bank online because of fears of identity theft or fraud or because they did not have access to a personal computer. They said they preferred to bank in-person at bank branches or on the phone with a customer service representative.
Early-intervention retirement planning: During the focus groups, older adults expressed an interest in early retirement planning programs and respectful budgeting workshops based on group sharing and value-based approaches to money management.
Financial Institutions across the country are developing services and products to address the comprehensive financial needs of older adults, but more must be done! Read the full working paper here.