Boomers don't trust direct deposit

[Amelia]

Boomers don't trust direct deposit

Survey says generation lags behind seniors in usage -- a trend that may mean trouble for taxpayers.

December 27, 2005

NEW YORK (CNNMoney.com) - Unlike today's seniors, the next generation of retirees is old-fashioned about direct deposit of paychecks and other payouts -- according to a survey released Tuesday, the "kids" don't trust it.

The survey, sponsored by the Department of the Treasury and the Federal Reserve Banks, found that 72 percent of seniors 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 findings could mean significant costs and security implications for Americans.

"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," Dick Gregg, commissioner of the Treasury's Financial Management Service, said in a statement.

According to the survey, there were three main reasons given by the people who don't use direct deposit: 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 study was conducted as part of the government's "Go Direct" campaign, aimed at encouraging Americans who receive Social Security and other government benefit checks to have their money deposited directly into their bank or credit union accounts.

The telephone survey of 1,400 adults was conducted in December by KRC Research and had a 2.6 percent margin of error.

[:"blue"]*This is weird. I'm a boomer. My brother and sister are boomers. We all use direct deposit and direct pay. [/]

[cricket]

Once this generation gets to the point that driving becomes burdensome, then, perhaps direct deposit will seem more feasible.

What about paying taxes though? I wonder what the percentages are for Boomers vs. Seniors in reference to their use of on-line tax services.

(I'm a pen-and-paper kind of gal myself. I will hold out to the bitter end to do my taxes by hand!)

[Ron Lambert]

A little over 30 years ago I was working at the University of Michigan as a technician in the Department of Naval Architecture, and I had direct deposit. They lost a contract with the navy and had to cut back, and my job was terminated. But then I seemed to get one additional weekly pay check after the last one I expected. I went into the bank, and had the teller check and confirm they had placed that extra $200 in my account. OK, I guessed that must be serverance pay. Fine. Well, when some checks bounced, I went back to the bank, and discovered that the extra $200 had been taken back out of my account.

Since then, I have distrusted direct deposit, because I have seen that those who do the direct depositing may think they have a right to take money directly back out of my account again, if they have a cozy enough relationship with the bank and they will let them do it.