updated 12/27/2005 9:18:27 AM ET 2005-12-27T14:18:27

A new survey by the government found a surprising reluctance among baby boomers to participate in direct deposit programs.

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The study, underwritten by the Treasury Department and the Federal Reserve banks, found that 59 percent of baby boomers — those born between 1946 and 1964 — take advantage of direct deposit of paychecks and government checks, compared with 72 percent of those 65 and older.

"If the trend with pre-retires 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," said Dick Gregg, commissioner of the Treasury's financial management service.

He added: "Taxpayers will bear the burden."

It now costs the government 83 cents to produce, mail and process a paper check, about 75 cents more than the 8.5 cents it costs to deal with a directly deposited sum.

The study found that the main reasons people avoid direct deposit are: they like to go to a financial institution to deposit their checks, they don't trust direct deposit or 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 campaign, launched in late 2004, emphasizes the security and convenience of direct deposits.

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

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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