Yahoo Finance I Work for a Bank: Here Are 6 Banking Tips for Retirees
You might think that by the time you’ve reached retirement, you have your financial needs wrapped up. However, getting too complacent with your money in retirement can be a mistake. And if you don’t have a good financial foundation in terms of how you’re banking, you could be short-changing yourself and your family.
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Fortunately, better banking habits are often relatively simple to implement. Here, we’ll examine some of the top banking tips for retirees, shared by three banking leaders.
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Embrace Mobile/Online Banking
While you might be comfortable using in-person banking services, it can be helpful for your finances to also engage in online or mobile banking.
“A common banking mistake of retirees is that they avoid using technology, because of concerns about security,” said Teri Williams, president and chief operating officer at OneUnited Bank.
While that can be a valid concern, it shouldn’t hold you back entirely.
“Avoiding the use of technology out of fear can reduce a retiree’s ability to make good financial decisions,” added Williams. “Mobile banking is very secure and gives you 24/7 access to your money and financial information.”
Just be sure to “never provide your confidential credentials to anyone,” she said.
One benefit of mobile or online banking is that it can make it easy to transfer money. You can also keep up with your finances while away from home.
“Many retirees spend a great deal of time traveling. Understanding your account management tools and ensuring you have access to your online and mobile banking can help you keep track of your money and avoid fees. It will also give you peace of mind while traveling,” said Scott Robertson, senior vice president and chief community banking officer at Tri Counties Bank.
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Watch Out for Fraud
While there are advantages to digital banking, it’s still crucial to be aware of security risks.
“Retirees are very susceptible to phishing, partially due to their lack of technology expertise, but more a result of an increase in fraud attempts,” said Wiliams.
“Almost everyone has received an email or text purporting to be ‘your’ financial institution or cell phone provider with an urgent matter. It’s very important that retirees ignore these emails and texts and contact their financial institution or cell phone provider directly,” she added.
Keep in mind that many bank-related scams can involve trying to gain access to your account or sensitive data in ways that your bank never would, like asking you to send account or credit card information by email, noted Robertson.
For clarity, you can always ask your bank about their procedures directly, such as by visiting a branch if possible or calling the number listed on their website. Be sure you’re going straight to the source, as opposed to, say, calling a number listed in an email, which might be fake.
Shop Around
To stretch your retirement savings further, it’s helpful to shop around for the best rates and lowest fees on banking products, such as to earn more interest from your savings account or certificates of deposit (CDs).
“A lot of retirees sit on a lot of cash,” noted John Blizzard, CEO at Seattle Bank and founder of CD Valet. “Your idle cash should be working for you.”
In other words, if you’re leaving a lot of money in a checking or savings account that hardly pays any interest, you could be foregoing significant income. Keep in mind that you don’t have to change everything, such as if you like your bank for checking purposes; but maybe you could earn a few thousand dollars more per year by moving to a different high-yield savings account provider.
You can easily find rate comparisons online, and if you’re not comfortable doing that, you might engage a family member to help, suggested Blizzard.
“There’s a lot of retirees who haven’t changed accounts in a long time,” he said. “If the difference is between earning a 4.5% return and a 4% return, it might not be worth your effort to switch. But if you’re earning 0.50% but could be earning 4.5% or 5%, maybe engage one of your kids to help you find the best bank.”
Also, you should make sure your bank provides free checking and shop around for a competitor if not, said Blizzard.
“You should not be paying a monthly fee on a checking account,” he said. “In this day and age, it’s kind of ridiculous.”
Avoid Gimmicks
While it can be useful to shop for the best rates, you should still watch out for promotional gimmicks that rope you in with high advertised rates that soon drop.
For example, you might find a “13-month CD special that has a great rate, but when it matures, it rolls into a CD that pays 1%. So you’ve got to remember to take action before it rolls into a very low rate,” said Blizzard.
To avoid this, you might instead look for a bank that has consistently high rates across banking products or at least a history of solid rates in a given area, rather than only choosing a bank based on a temporary promotion.
Update Your Beneficiaries
A simple but important banking tip for retirees is to make sure you have the right beneficiaries in place so your assets can pass on to your intended recipients easily.
“Ensure all of your accounts are updated with your beneficiary designations. This includes bank accounts, retirement accounts, and investments. If you have a trust in place, be sure all accounts are titled correctly,” said Robertson.
Maximize FDIC Insurance
Given some recent banking issues, such as the Silicon Valley Bank collapse, some people are worried about whether their money is safe. However, if you understand how FDIC insurance can protect your deposits, then you can potentially lower your risk and feel more comfortable. In some cases, you can even qualify for more than the standard $250,000 FDIC insurance limit.
“Many underestimate and/or don’t understand how FDIC insurance works and therefore spread their money out across multiple banks, when many times this is not necessary. Ask your local banker to help you understand the rules of FDIC insurance or visit the calculator on the FDIC website,” said Robertson.
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This article originally appeared on GOBankingRates.com: I Work for a Bank: Here Are 6 Banking Tips for Retirees
