Use Social Security report to engage customers on investment strategies

Editor’s note: This column was included in the June 6 version of The Pulse, a weekly BankBeat newsletter sent to subscribers.

A month ago, the trustees who oversee the Social Security and Medicare Trust Funds issued their annual report. It wasn’t exactly breaking news.

The Old-Age and Survivors Insurance Trust Fund will be able to pay 100 percent of total scheduled benefits only until 2033, which is unchanged from last year. If no changes are made to the program between now and then, the fund’s reserves will be depleted and continuing program income will be sufficient to pay 79 percent of total scheduled benefits. 

Because it’s an election year, we should expect to hear a lot more about the reasons for this projected shortfall (lack of immigration; reduced birth rates; people living longer), along with the pros and cons of potential remedies (increasing the payroll tax; removing the earnings test cap; prolonging full retirement age). You can bet both political parties will make the pitch that only they are acting in our best interests. I may sell my television before too long.

All of this got me thinking about ways you could parlay this “news” into customer outreach – to those currently at retirement age and to those for whom retirement is barely an apparition. News pegs can be gifts for businesses; even off-hand comments that go viral can be capitalized on if you’re paying attention. Touting products and services by themselves doesn’t always generate a spark, but when you link those products and services to something that’s timely, it’s easier to pique interest. Now might be the time for your blogs and social posts to focus on investment and retirement products. 

Adult-focused financial education and help planning for retirement is sorely needed in the marketplace and community banks are in the best position to provide it. Community banks are far more trustworthy than, say, the government. Besides, you don’t deploy fear as a currency. Most people believe Social Security is just one piece of the financial pie for retirement. Remind customers that you are available to help grow the other slices.

There’s a lot of angst around the potential depletion of Social Security. It’s always been a political hot button, one the 65 million Americans older than age 65 are watching. I would expect that even with our dysfunctional Congress, changes will be put into place prior to fund depletion. 

Under the Social Security Act, people are legally entitled to their full benefits. It can be good business to talk to clients about how a projected shortfall in the Social Security Trust Fund doesn’t automatically equate to a reduction in benefits. It can be good business to invite people to focus on their entire portfolio by considering what you have to offer. And, it can definitely be good for business to provide reassurance. 

Jackie Hilgert

Editor-at-Large

BankBeat