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Survey Reveals Baby Boomers Lag Seniors in Direct Deposit Usage

Surprising Findings Underscore Importance of Treasury's New Go Direct Campaign

WASHINGTON, DC - (Dec. 27, 2005) - A new survey has revealed a troubling difference between today's seniors and the next generation of retirees - one that could have significant cost and security implications for Americans. Among those ages 65 and older, the survey found that 72 percent use direct deposit. In contrast, only 59 percent of Americans ages 45-64 - the bulk of the baby boomer generation - said they use it.

The nationwide survey, sponsored by the U.S. Department of the Treasury and the Federal Reserve Banks as part of their Go Direct campaign, provides a surprising twist on commonly held perceptions about these age groups, especially in light of another finding that showed baby boomers are 20-25 percent more comfortable with technology than seniors. Go Direct, a national campaign launched earlier this year, aims to inform more Americans about the security, ease and convenience of using direct deposit for Social Security and other federal benefits, and to encourage them to sign up.

"There is no safer way to receive Social Security than direct deposit," said Dick Gregg, commissioner of the Treasury's Financial Management Service. "Last year alone, half a million people reported problems receiving checks. In stark contrast - and contrary to what 38 percent of those surveyed believe - no direct deposit payment has ever been lost or stolen.

"Furthermore, if the trend with pre-retirees continues, the sheer size of the 77 million baby boomer population - coupled with impending postage increases - will drive up the government's costs to issue paper checks exponentially… and taxpayers will bear the burden."

Gaining Control

Why the resistance to direct deposit? According to the survey, among the 40 percent of Americans who do not currently use direct deposit, there were three leading reasons - 21 percent said they like to go to a financial institution to deposit their check; 19 percent said they don't trust direct deposit; and 18 percent said they like receiving a paper check.

The survey also revealed that Americans' leading financial issue for the new year, behind reducing debt, is gaining more control over their money. For many, direct deposit is simply the best way to receive their money, including Social Security and other federal benefits. Direct deposit is safer, easier and gives people more financial control. Nearly 95 percent of those surveyed who currently use direct deposit have had a positive experience with it.

"Direct deposit gives you far greater control over your money and time than waiting for a paper check to arrive each month," Gregg said. "Come payment day, you know your money will be safely in your account - on-time, every time."

For many years, direct deposit has been a priority for the Treasury and the Federal Reserve Banks. Go Direct champions a long-standing effort to shift from paper payments to direct deposit. The integrated campaign relies on trusted sources - such as financial institutions and community-based organizations - to reach seniors, disabled people and other federal benefit recipients where they live, work and socialize. Go Direct launched nationwide in September 2005.

Go Direct has established Web sites, www.GoDirect.org (English) and www.DirectoASuCuenta.org (Spanish), where people can sign up online for direct deposit of federal benefits or get an enrollment form to mail in. The campaign also has toll-free numbers to help people sign up for direct deposit right over the telephone: (800) 333-1795 (English) and (800) 333-1792 (Spanish).

These results are of a nationally representative telephone survey of 1,400 adults, ages 18 and over, conducted December 3-12, 2005, by KRC Research. The margin of error for the overall study is +/- 2.6 percent at the 95 percent confidence level.