How to Encourage VITA Clients to Save Through Opportunity to Save

1. How to Encourage VITA Clients to Save Through Opportunity to Save Training for Tax Preparation Staff & Volunteers

2. Purpose of This Presentation Provide background on Opportunity to Save Explain Series I U.S. Savings Bonds Train you to promote and process Series I Savings Bonds using Form 8888

3. Why is Tax-Time Savings Important? Assistance and guidance from a trusted tax preparer is a critical to helping tax clients save at tax time. • Texans do not save enough • 51% of Texas households don’t have adequate savings • 1 in 3 households don’t have a savings account • Many low-income individuals get little or no structured help to save that others do (e.g., 401(k) plans) • Windfall lump sums of money like the Earned Income Tax Credit are hard to manage and often used immediately instead of supplementing a family’s income throughout the year

4. Promoting Savings Bonds Purchase at VITA Sites: The Tax Time Opportunity • The Opportunity - On the tax form, filers can split their refund into multiple accounts and purchase Savings Bonds without an extra trip to the bank • Assistance– Tax sites can promote saving and offer savings incentives • Funds to Save – • Average Texas VITA Filer (2013): • Annual Income = $20,997 • Average Tax Refund = $2,073 • However, less than 2% of Texas VITA filers purchased Savings Bonds or split and saved a portion of their refund on the tax form

5. Highlights of the Tax-Time Savings Bond Policy • Tax filers with refunds of at least $50 can purchase Series I U.S. Savings Bonds on the tax return usingIRS Form 8888 • Paper bonds are mailed within 3 weeks • Filers may buy bonds for themselves and spouse if filing jointly • Filers may buy bonds for two other people as gifts • Must be purchased in multiples of $50 • $50 minimum, $5,000 maximum

6. Opportunity to Save 2014 Project’s Statewide Implications • This project at your VITA site is part of a broader statewide initiative to grow the number of Texas VITA savers Characteristics of 2013 participants • 68% were first-time savers of their tax refund • 75% said the gift card was important in their decision to save • 42% were saving for education, which participants’ reported as their top savings priority Project Background • Opportunity to Save nudges filers to save by offering them a $25 Grocery/Discount Store Card if they save a portion of their tax refund. • Requirements for filer to receive $25 gift card: • Must receive at least a $500 tax refund • Must purchase a minimum of $100 in U.S. Savings Bonds • Needs to meet income eligibility to file taxes at VITA site

7. Example Savings Bond Issue Date 123-45-6789 01 2009 John Q. Saver 123 Main Street Anywhere, WA 99000-0000 OR Jen Saver FRB-MPLS 04-15-07 2 Owner’s Name & Address (Co-Owner Name, if any)

8. Main Features of Series I U.S. Savings Bonds • Q: How many Americans currently hold Savings Bonds? • A: 55 Million.(That’s 1 in 6!) • Safe – Protected by U.S. Gov’t & replaced if lost or stolen • Accessible– Buy for as little as $50 • Competitive – Interest rate adjusts every six months, currently paying 1.38%, no fees • Simple– Sold at “face value” ($50 buys $50 bond) • Long-term– Must be held for 1 year (Cannot be redeemed during 1st year) • Portable– can redeem at most banks and credit unions

9. Savings Bonds as Gifts During the 2013 tax season, 31% of participants purchased savings bonds for children • 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) • Tax client & gift recipient will be listed on bond as co-owners • Either party can redeem bond

10. Bonds vs. Savings Accounts vs. CDs *Source: National Average rates, www.bankrate.com

11. Your Role In Promoting Opportunity to Save Volunteers Matter 92% of participants said they learned about the opportunity to purchase bonds through their tax preparer or site staff. • Educate the client – describe promotion and savings bonds • Encourage a decision – ask client if he or she think investing in bonds would work for them • Execute the order completing IRS Form 8888 if you’re a tax preparer or quality reviewer

12. Resources to Help You Promote Opportunity to Save Resources can be downloaded here: http://opportunitytexas.org/our-grants/tax-time-savings-implementation-resources • Conversation Tips • Conversation Starters & Managing Client No’s Sheet • Role Play Dialogue Sheet – helps you practice having conversations with clients about promotion • Savings Bond Information • U.S. Savings Bonds FAQ Sheet • Form 8888 Reference Sheet • Resources for Client • Managing Your Savings Bonds Information Sheet - explains how to check bond balance, purchase bonds online and redeem bonds

13. How to Talk to Clients About the Promotion • First get information from filers: Have they heard about the project? What are their hesitations? • Then, give information: educating filers and empowering them to be savers Source: SaveUSA Account Program 2012 Tax Season presentation, Image courtesy of AssetPlatform.org

14. A Few Conversation Starters • To raise the topic of savings • “Has anyone explained Opportunity to Save this year?” • If yes – “What questions do you have about it?” • If no – “May I briefly tell you about it?” • Then highlight 2-3 features of savings bonds • “They are currently paying 1.38% interest rate” • “With a $100 bond, you receive an immediate 25% return on your investment with the $25 gift card. That’s hard to beat.” • See Savings Bond FAQ sheet for more Savings Bond features

15. A Few Conversation Starters • If the client is receiving a refund • “Congratulations on your refund! What are your plans for it?” • Response • Listen thoughtfully • Reframe what client said • Highlight two features of the bond • Ask – “Would investing in a Savings Bond would work for you?”

16. How to Respond to Some Common Client Hesitations • When clients are skeptical about a ‘catch’ or risk • “Can’t access funds for one year but after that you are free to redeem them” • “The full faith and credit of the U.S. government guarantees that their interest and principal payments will be paid on time.” • “There are no fees to purchase or redeem bonds” • Really just can’t afford it • “Maybe this isn’t for you” • “Even a little is a start, but maybe this isn’t for you.” See Client Conversations and Managing Client No’s Sheet for how to manage other common client hesitations

17. Managing Client No’s • Be prepared to get a lot of no’s • Don’t be discouraged • Even just 1 yes for every 20 no’s is a great participation rate • Keep asking - EACH AND EVERY CLIENT deserves to at least be offered the option, even if they decide not to participate • Respect the decision of those who say no • Don’t be judgmental or too pushy • Your role is to provide them information they need to make the decision that’s right for them

18. Form 8888 Example • Taylor Knowles is getting a $700 refund • She wants to purchase: • $400 worth of bonds for her daughter, Tania Knowles • $100 worth of bonds for herself and to make her grandson, Shawn, a beneficiary • Taylor wants the remainder of the refund to be sent in the form of a check How should Form 8888 be completed?

19. $400 for daughter Tania $100 for self Grandson as beneficiary Remainder Total Refund

20. Pop Quiz • Which of the following are true about Series I U.S. Savings Bonds: • They pay a competitive interest rate (1.38% currently). • They can be purchased for as little as $50. • They can be redeemed at most banks and credit unions. • They can be purchased as gifts for anyone else – all you need is the gift recipient's name.

21. Pop Quiz • Which of the following are true about Series I U.S. Savings Bonds: • They pay a competitive interest rate (1.38% currently). • They can be purchased for as little as $50. • They can be redeemed at most banks and credit unions. • They can be purchased as gifts for anyone else – all you need is the gift recipient's name.

22. And 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

23. And Another Quiz However, if bonds are redeemedwithin the first five years, then the 3 most recent month’s interest is forfeited. • How long must Series I U.S. Savings Bonds be held before they may be redeemed? • 6 months • 12 months • 5 years • They may be redeemed any time

24. Remember… • This may be a client’s only opportunity to save all year • You will get a lot of No’s, but you don’t know who will say yes unless you ask! • Everyone deserves the opportunity to decide for themselves • You can make a HUGE DIFFERENCE in a client’s life by asking them if they want to participate and potentially save for the first time, helping them get a step closer to financial stability

25. For more information: • OpportunityTexas.org – Programwebsite • TreasuryDirect.gov – U.S. Savings Bonds information • Scott Zienty, OpportunityTexasAmericorps VISTA, zienty@cppp.org, (512) 320-0222 ext. 114

26. Thank you for reviewing!

27. We adapted this presentation from the Doorways to Dreams (D2D) Fund Tax-Time Savings Bonds and Form 8888 presentation, http://bondsmakeiteasy.org/resources/training. We also used Foundation Communities’ Conversations Starters and D2D’s Tax Time Savings Bonds Site Coordinator Toolkit Role Play Exercise to develop our conversation starters