LAS VEGAS — Credit unions might be well positioned to take advantage of the retirement income market given the consumer's needs to plan longer for retirement and the growing trend of people waiting until they're closer to their golden years to save.

According to Robert Grieb, principal and managing director of The Diversified Services Group, Inc., credit unions can strive to implement a “total retirement strategy” that fills the needs of its members. Based on a DSG survey of financial representatives, the most effective means for acquiring new retirement income clients has come through existing clients and from referrals from outside and inside a credit union or bank. Grieb also said credit unions might do better to focus on a much broader retirement income market than other channels. This way, a larger volume of clients and prospects exists and a wider range of resources and needs are available.

“Longevity is a real issue,” Grieb said referring to the fact that people are living longer. Indeed, there is a 25% chance of one person in a relationship living to age 97. Females have a 25% chance of living to age 94 while males have a 25% chance of living to age 92. In 2005, the average years spent in retirement were 18 compared to four years in 1955. Grieb said those with more retirement years tend not to have defined benefit plans, an opportunity credit unions could offer. Meanwhile, baby boomers continue to be a segment of the population to reckon with, Grieb said. They control $12.5 trillion of financial assets and head 40 million households.

At $6.8 billion Orange County Teachers Credit Union, members in the 45-65 age group use investment services at the financial institution, said Sandra deChastain from OCTCU. The credit union continues to implement strategies to raise the 1% penetration mark among its 350,000 members including holding several retirement education workshops each month. Due to their popularity, OCTCU has had to expand its half-day retirement forum to two days and even three days in some counties.

“Ninety percent of the people who attend want to know about saving for retirement or 529 plans,” deChastain said.

More transfers of wealth are the trend at $1.6 billion Kern Schools FCU, said Larry Braley, program manager of investment and insurance services. Members are seeking guidance on 403b plans, the sale of properties to generate income and inheritances. The credit union's financial advisors are all in the process of training to receive the certified financial planner designation, Braley added. The hope is by having the CFP status, it will offer one more tool to stay competitive and bring value to the members.

“We're seeing a fair amount of members retiring and receiving inheritances,” Braley said. “We have a robust defined benefit plan.”

Grieb said credit unions are apt to target those with investable assets ranging between $500,000 to $1 million, but according to a 2004 DSG survey, 64.3% of pre-retirees will seek out a financial advisor or planner first on things like retirement rollover distribution. Banks and credit unions were second to the bottom at 20% ahead of insurance agents but behind of investment and mutual fund companies, plan providers and stock representatives. –[email protected]