Banking Is Personal - Blog
Welcome to Banking is Personal. This blog is a place where Salin Bank hopes to give you information you can use. Our goal is to arm you with resources and knowledge about mortgages, wealth management, business lending and other banking-related issues that affect you and your financial objectives.
February 18, 2014
Rethinking the ‘4 Percent Rule’ for Retirement Planning
Most retirees have at least one thing in common: to outlive their money. For years, many soon-to-be retirees have relied on the so-called gold standard of retirement planning called the “4 percent rule.”
Created in 1993 by financial planner Bill Bengen, the 4 percent rule dictates that if retirees withdraw no more than 4 percent from their retirement savings every year, their nest egg should last for the rest of their life.
The problem is that the percentage itself was calculated in the 1990s and at a time when portfolios were earning about 8 percent. Unfortunately, that’s no longer a reality. Most portfolios today earn about 3.5 percent to 4 percent.
Changing economic times make it more important than ever to work with an investment planning expert who can help you determine realistic financial goals. At Salin Bank, our wealth management team members will work with you, one on one, to understand your financial objectives and help you create a customized financial plan for your future. Whether you are a business owner providing retirement benefits to your employees, a young professional just starting out in the professional world, or someone thinking about retirement, our banking specialists will provide the information, tools, and objective advice you need to make informed decisions about savings, investments and retirement.
What Drives a Customer to Switch Banks?
The decision to change your familiar bank may not be easy but it’s a decision that in many cases is driven by frustration with service.
A recent J.D. Power and Associates 2013 Retail Banking Satisfaction Study found that customers generally do not switch banks unless they are also “pushed” away from their prior relationship. The survey, which garnered feedback from more than 50,000 consumers, measured various aspects of customers’ banking experiences, including account information; channel activities; facility; fees; problem resolution; and product offerings.
According to the study, poor service and high fees were the most likely reasons that customers away moved their banking to another bank, while branch convenience, promotions and recommendations helped attract customers to a new bank.
"While big banks have traditionally had an advantage over smaller banks in terms of convenience of branch locations and technology, their disadvantage was often in the personal service customers desired," said Jim Miller, senior director of banking at J.D. Power and Associates. "Successful banks are not pushing customers out of the branch, but rather providing tools that make it easier to conduct their banking business when and where it is convenient for them.”
The survey offers the following tips for consumers when shopping for a new bank:
*Make sure to review your current bank's fee structure, as well as those of its competitors, to ensure the services and products you're receiving are those that best meet your needs.
*Think about how you want to conduct business with your bank. If personal service is most important to you, how are you treated when you walk into a branch? If you prefer to deal with your bank remotely, what type of mobile and online tools do they offer? With a little research, you can find banks that offer the best of both worlds.
*Evaluate the products and extra services you receive from your bank - including discounts or rewards programs - to ensure they are ones that meet your needs.
*Consider how often you experience problems with your bank, including how well your bank resolves problems and complaints.