Tax%20Time%20Savings%20for%20all%20with%20U.S.%20Savings%20Bonds:%20Training%20Webinar

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Tax Time Savings for all with U.S. Savings
Bonds Training Webinar
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Why Saving Matters

• Role of Savings
• emergency reserves
• for get ahead investments (home, education,
  retirement)
• alternative to costly credit
• provides sense of security, comfort
• Process of Saving
• promotes thinking ahead, prioritizing
• models behavior for kids
• emotional payoff (pride, satisfaction)

No one has everspent his wayout of
poverty. Dr. Michael Sherraden
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But Saving is Hard

• Challenges lower-income savers face
• Limited income a minimum wage worker makes 14K
  a year.
• Consumerism pressure to buy is everywhere.
• Family friends are often in need, creating
  pressure to share resources.
• Few opportunities most people save with
  structured help (e.g., 401(k) plans), but poor
  people get little or no such help.

Q How many Americans currently hold Savings
Bonds? A 55 Million.(Thats 1 in 6!)
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With Help, Anyone can Save
Tax Clients want to Save In one study, 49 of
VITA clients agreed I wish that when I had
cash, I was better disciplined saved it rather
than spent it.

• Some Examples
• In one matched saving test
• 2,300 people saved 1.3MM - 2.2 of their income,
  an average of 550
• Almost half lived below poverty level 4 in 5
  lived below 2x the poverty line
• In test of U.S. Savings Bonds
• 1,385 VITA tax clients (6) saved 250k in bonds
  for 2,300 people
• Buyers average income 20K
• Average amount saved 192

500 invested in a US Savings Bond at 4 for 10
years will grow to 743.6
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A Quick Quiz

• Low and moderate income tax filers receive how
  much money each year in federal tax refunds?
• 100 million (average of 500 per household)
• 1 billion (average of 1,000 per household)
• 100 billion (average of 1,680 per household)

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A Quick Quiz

• Low and moderate income tax filers receive how
  much money each year in federal tax refunds?
• 100 million (average of 500 per household)
• 1 billion (average of 1,000 per household)
• 100 billion (average of 1,680 per household)7

• What might help people save some of these funds?

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Tax Time Opportunity
Assistance and guidance from a trusted tax
preparer is a critical to helping tax clients
save at tax time

• Key elements to foster saving
• Funds to Save - 100 billion is returned to poor
  families each year
• On average, 1,680 per household
• Up to 20 of annual income
• Assistance tax preparers can serve as trusted
  helper to suggest saving
• Convenience saving at tax time requires no 2nd
  step, extra trip to bank

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Something to Consider

• For many lower-income clients
• tax season is the only chance each year when
  saving seems possible.
• a tax preparer may be the only person all year
  who asks them to think about saving.
• Most people wont save unless someone asks them
  to consider it.
• VITA volunteers staff owe it to their clients
  to raise this important topic.

Buying 100 U.S. Saving Bonds every year for 20
years would leave a tax client with over 3,000
enough to fill the gaps in a childs college
scholarship.
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A Proposition
Did You Know? From 1917-1966, the YMCA and
others sponsored National Thrift Week, complete
with local Thrift Captains

• How about a Return to Thrift?
• culture that supports saving
• more families with financial reserves
• emphasis on the future, planning
• especially critical for working families
• But How?
• need a secure, trustworthy product
• available to all, at key moments
• long-term in nature
• able to be gifted

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Another Quick Quiz

• How many Americans own U.S. Savings Bonds?
• Over 1 million
• Over 10 million
• Over 50 million

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Another Quick Quiz

• How many Americans own U.S. Savings Bonds?
• Over 1 million
• Over 10 million
• Over 50 million
• 55,000,000 Americans own savings bonds 1 in 6!

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Quick Quiz

• How many Americans own U.S. Savings Bonds?
• Over 50 million
• 55,000,000 Americans own savings bonds 1 in 6!
• In the 1960s, tax filers could receive their
  federal refund in the form of a savings bond.
• True
• False

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Quick Quiz

• How many Americans own U.S. Savings Bonds?
• Over 50 million
• 55,000,000 Americans own savings bonds 1 in 6!
• In the 1960s, tax filers could receive their
  federal refund in the form of a savings bond.
• True
• False

Yes! Heres an example
1962 Form 1040A With option to receive refund as
U.S. Savings Bond
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Its easy to do on Form 8888

• Just complete Part II for U.S. Savings Bonds
• If bonds are for tax filer just complete Line 4
• If bonds are for others, complete Lines 5 and 6
• If beneficiary check box
• Enter amounts on RHS

.
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U.S. Savings Bonds Overview

• Series I U.S. Savings Bonds
• an IOU from the US Government
• safe principal protected by full faith
  credit of U.S. government
• accessible buy for as little as 50
• smart solid return (1.94), no fees
• simple sold at face value (50 buys 50
  bond), rate adjusts twice a year
• long-term must be held for 1 year before
  redemption (cashing in)
• portable may be redeemed at most banks credit
  unions

U.S. Savings Bonds have been a popular, respected
investment option for over 70 years.
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Important Bond Facts

• Redemption (cashing in)
• At most banks credit unions
• Requires valid ID
• Minimum holding
• Must be held for 1 year
• If redeemed before 5 years, lose 3 months
  interest
• Loss / theft replacement
• Complete Treasury Form PD F 4000 or Form PD F
  1048
• Get signature certification from bank
• Mail to Treasury

Proceeds from Savings Bonds are exempt from
federal tax if used for secondary education
(check IRS Publication 970 for details).
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Savings Bonds as Gifts
In a 2008 study, 68 of buyers purchased savings
bonds for others, mostly children grandchildren

• Tax Clients can buy bonds for
• Themselves
• And/or up to two other people
• e.g., kids, grandkids, spouses, nieces / nephews,
  godchildren, etc.
• Details
• Tax client needs only name of gift recipient (no
  SSN)
• Client gift recipient will be listed on bond as
  co-owners
• Either party may redeem bond

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Example Savings Bond
Issue Date
Purchasers Social Security Number
01 2009
123-45-6789
John Q. Saver 123 Main Street Anywhere, WA
99000-0000 OR Jen Saver
FRB-MPLS 04-15-07 2
C000090007 04 000000000000
C000000000I
Owners Name Address (Co-Owner Name, if any)
Authentication Stamp
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Bond Features Benefits
Benefits
Feature
Reach saving goal sooner
Competitive return (1.94 currently)
No fees to erode savings
No fees
Simple tax site order process saves time
Convenient
Easy to give savings as a gift
Can buy for others
Value not lost as prices rise
Inflation protection
Loss theft protection
Savings are safe
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Bonds vs. Savings Accounts or CDs

• Savings Bonds CD-like returns, no fees and a 50
  minimum

Series I U.S.Savings Bond
Typical Savings Account
Typical 1 Year Certificate of Deposit (CD)
Rate of Return
.51
.80
1.94
Annual Fees
0
0
0
Minimum to Open
100
1,000
50
Rate Fixed
No
Yes
Adjusts bi-annually
Minimum Holding Period
None
1 year
1 year
None
All interest earned to withdrawal date
3 months interest (redemptions within 5 years of
purchase)
Early RedemptionPenalty / Forfeiture
ChexSystems Review
Yes
Yes
No
No
No
Yes
May Buy as a Gift
Source National Average rates, www.bankrate.com
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And Another Quiz
Which of the following are true about Series I
U.S. Savings Bonds A. They pay a competitive
interest rate (1.94 currently). B. They can be
purchased for as little as 50. C. They can only
be redeemed where they were purchased. D. They
can be purchased as gifts for anyone else all
you need is the gift recipient's name.
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And Another Quiz
Which of the following are true about Series I
U.S. Savings Bonds A. They pay a competitive
interest rate (1.94 currently). B.They can be
purchased for as little as 50. C.They can only
be redeemed where they were purchased. D.They can
be purchased as gifts for anyone else all you
need is the gift recipient's name.
All of these statements are true except letter
C. U.S. Savings Bonds can be redeemed at most
banks and credit unions nationwide, not just
where they were purchased.
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Yet Another Quiz

• How long must savings bonds be held before they
  may be redeemed?
• 6 months
• 12 months
• 5 years
• They may be redeemed any time

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Yet Another Quiz

• How long must savings bonds be held before they
  may be redeemed?
• 6 months
• 12 months
• 5 years
• They may be redeemed any time

U.S. Savings Bonds must be held for at least 12
months before they may be redeemed. Bond buyers
should understand that they can not access funds
saved in bonds for one year after purchase.
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Finding People Want to Save

• LMI tax clients value saving
• 49-63 of buyers saved part of refund in the past
• 48 of decliners
• Saving is a growing concern

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Finding People Like Savings Bonds

• Pleased with bond purchase
• Familiar with bonds
• 65 of tax clients familiar (vs. 32 for IRAs)
• 63 of tax clients had bought bond, received bond
  as gift or known someone who has owned

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Finding Who Saves

• Demographics
• Parents 70-75 of buyers grandparents 4-15
• Gender 79 female
• Age 40 years, same as sample
• Income average AGI of buyers 20k
• Ethnicity African American over represented
  among buyers Hispanic slightly under
• Other
• Large tax refund (3.4k for buyers vs. 1.7k)
• First time savers as high as 50

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Finding Why People Save

• Who for kids grandkids
• 70 of buyers bought for others
• 59 of buyers I want to put something away for
  my kids future
• What for education, retirement
• Children / family (27), Education (23),
  Retirement (18)
• Time horizon long-term
• 2/3rds still saved after 3 years (in line with
  national average)

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Finding How People Decide to Save

• When at point of sale
• 50 report deciding to save at tax site
• How human contact
• learned about option to buy bonds today
• 79 when someone talked to me
• 12 from brochure or poster
• 20 before coming to tax site

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Presenting Savings

• Consider
• Saving requires many tax clients to take a leap
  of faith
• What if they need the money later? Or their
  savings disappear?
• Clients generally trust you, their tax preparer
  or other VITA staff
• You are there at the key moment when the refund
  amount is clear
• As the face of any savings offer, your role is
  critical.

54 of bond purchasers during the TS 07 pilot,
said they had no money saved or invested prior
to buying bonds
As tax preparer, YOU play a crucial role in a
clients decision to save for the future - their
own, or that of their children or grandchildren.
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Bond Order Process

• How it Works
• Client chooses to order bond in Part II of Form
  8888
• Government mails bonds to clients
• Your Role(s)
• Explain opportunity - describe savings bonds
  chance to order at tax site
• Seek decision ask client to decide if, how much
  for whom to order bonds
• Process order complete IRS Form 8888 and enter
  name of owner and co-owner(s) or beneficiary and
  amount for bonds

Tax Preparers Matter In a 2007 study, 41 of tax
clients who saved part of their refund decided to
do so only after meeting with their tax preparer.
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Talking with Clients
New Savers? 54 of tax clients who bought savings
bonds in 2007 said they had no money saved or
invested prior to buying bonds.

• Bonds are a good fit for
• Parents / guardians bonds are popular gifts for
  kids
• 68 of 08 buyers bought bonds for others
• First time savers seeking a safe way to start
  saving
• Bonds can be ordered for as little as 50
• Long-term savers who want a tool to build
  savings over time
• People on ChexSystemsSM who do not qualify for
  a bank account

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Conversation Starters

• When a client speaks
• Listen closely
• Look her in the eyes
• Never interrupt
• Consider repeating back her key points

• To raise the topic of saving, try open-ended
  questions
• I see you have a savings bond brochure have you
  had a chance to look at it what do you think?
• We have a new, free service this year to help you
  save have you heard about it what questions do
  you have?
• Have you ever heard of US savings bonds? What
  have you heard? or- May I tell you about them?
• Do you recall how you used last years tax
  refund? What are your plans this year?

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Seeking A Decision

• To help clients decide about buying bonds
• Answer any questions tactfully correct any
  misinformation
• Briefly re-state 2 or 3 relevant bond features
• For example, as I mentioned, bonds are very
  safe, available for just 50, and earn 1.94
  right now.
• Then ask directly, would you like to order a
  savings bond today?
• If client declines
• Politely ask them why
• Correct any misunderstandings, ask again

• Remember
• Saving is hard many clients wont say yes.
• It is normal for about 1 in 10 to order bonds.
• Please keep asking clients about bonds even if
  many say no.
• Always respect clients choices, as they know
  whats best for them.

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Possible Client Concerns
During 2007 2008 pilots, bond purchases used,
on average, 6 of their refund to buy savings
bonds

• Concern I cant afford to save
• Response
• Even a little is a start you can begin for 50
• You just saved 150 in tax preparer fees - you
  could save some of this amount
• How did you use last years refund? Buy a 50
  bond youll still have some of your refund next
  year
• Concern I dont trust the government
• Response
• 55 million Americans hold Savings Bonds
• Savings bonds have been sold since 1934
• You trust the govt to send your refund
• The same department that processes your refund
  issues bonds

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Client Concerns (more)
Q Does one pay state or local Income taxes on
Savings Bonds? A No.

• Concern Ill save by myself, my own way
• Response
• Its great you already have a plan to save!
• We are offering another saving option that can
  save you time a trip to the bank.
• Bonds are among the safest saving options with
  very competitive returns.
• You can buy a bond for your kids, grand-kids or
  others - bonds make great gifts.
• For most of us, if we dont do it now we may
  never do it.
• Its free to split your refund and buy a bond
  today.

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Another One

• Which of the following are good ways to begin a
  conversation about savings bonds with tax
  clients?
• Do you want to buy a savings bond?
• Have you heard about our new saving option this
  year? What questions do you have?
• Has anyone talked with you today about savings
  bonds? What do you think about them?

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Another One

• Which of the following are good ways to begin a
  conversation about savings bonds with tax
  clients?                         
• A. Do you want to buy a savings bond?
• B.Have you heard about our new saving option this
  year? What questions do you have?
• C. Has anyone talked with you today about savings
  bonds? What do you think about them?
• Both letter B C are good conversation starters.
  
• They are open-ended, non-threatening and will
  help you learn more about the clients thoughts
  and feelings.

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Final Quiz

• If a client says Im not interested which of
  the following is the best way to respond?
• Fine. How do you want to receive your refund?
• Why? Savings bonds are a great way to save and
  saving is really important.
• Okay, thats fine. Thanks for considering it. It
  would help me to understand why you arent
  interested could you give me some idea?

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Final Quiz

• If a client says Im not interested which of
  the following is the best way to respond?
• Fine. How do you want to receive your refund?
• Why? Savings bonds are a great way to save and
  saving is really important.
• C. Okay, thats fine. Thanks for considering it.
  It would help me to understand why you arent
  interested could you give me some idea?
• Letter C is the best response.
• It accepts the clients answer but keeps the
  conversation going and provides an opportunity to
  identify and correct any misunderstandings about
  savings bonds.

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YOU can Encourage Savings Habits

• PLEASE
• Ask every client who has a refund
• If you dont, who will?
• Tax time may be a clients only feasible saving
  opportunity all year it may be a year before
  they have another chance.
• It never hurts to ask you cant be sure who will
  say yes unless you ask!
• Everyone deserves a chance to decide for
  themselves.

Did you know? 81 of those who bought savings
bonds in 2007 said they were very happy with
their purchase!
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Savings is hard. Bonds make it easy

• Multiple dimensions
• National vs. Local
• Offline vs. Online
• Lots of outreach into the communities (consumers,
  gatekeepers, tax preparers)
• Support of elected officials
• Local media coverage PSAs, etc.
• Social media and campaign web site

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Training Content and Delivery

• One webinar / classroom Powerpoint presentation
• Why savings matters, savings bond features and
  how to present savings at tax time
• Two video presentations
• Role play video on how to offer / promote bonds
  to clients
• Bond Stars video successful tips from star
  bond coordinators
• Role play script for class room training
• FAQs and Guides

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Training Content and Delivery

• Available for download on
• www.bondsmakeiteasy.org/taxpreparers/training
• Please download and e-mail to other sites /
  organizations interested in training
• Available for viewing, sharing with others, and
  downloading on Social Media sites
• http//www.slideshare.net/bondsmakeiteasy
• http//www.scribd.com/bondsmakeiteasy
• Please view, read, share, comment, download,
  train!

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Marketing / Communication materials

• All available on http//www.bondsmakeiteasy.org/ta
  xpreparers/materials
• Communications toolkit
• Outreach collateral
• Posters, flyers, buttons
• Point of Sale collateral (for tax sites)

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Join our Campaign offline

• Pledge to buy a bond in 2013
• Promote it at your tax sites
• Build awareness of the policy among your partners
  and networks
• Include blurbs about the policy in your
  newsletters or e-mail blasts
• Encourage public officials to publicize the new
  policy in constituent communications
• Have public officials speak about the option
• Work with employers and employee unions to
  promote the opportunity
• Distribute Marketing / collateral (FREE download
  on www.bondsmakeiteasy.org/taxpreparers/materials

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And Online

• Like BondsMakeitEasy on Facebook
• and share the campaign with your family, friends
  and colleagues www.facebook.com/bondsmakeiteasy
• Follow BondsMakeItEasy on Twitter
  www.twitter.com/bondsmakeiteasy.twitt
• View and Share our videos on Youtube

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Thank you!

• For more information
• visitDoorways to Dreams (D2D) Fund at
  http//www.d2dfund.org/ and Bonds Make it Easy at
  http//bondsmakeiteasy.org/
• Preeti Mehta
• pmehta_at_d2dfund.org
• (617)-541-9065
• about Series I U.S. Savings Bonds, visit
• The Bureau of Public Debt at www.treasurydirect.go
  v/indiv/products/prod_ibonds_glance.htm