Survey finds LGBTQ Americans less confident in retirement planning – InsuranceNewsNet

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This year’s Retirement Confidence Survey (RCS), which measures the attitudes of workers and retirees on retirement-related issues, found that LGBTQ Americans are less confident than non-LGBTQ Americans in believing they have enough financial assets to live comfortably in retirement.

The survey conducted by the Employee Benefits Research Institute (EBRI) and Greenwald Research for the first time included a sufficient sample of LGBTQ Americans to allow an analysis of the challenges that LGBTQ workers and retirees face when they are preparing for and living in retirement. The results were presented in a recent webinar.

LGBTQ demographics

Craig Copeland, director, Wealth Benefits Research, EBRI, said about 10% of Americans identify as LGBTQ. They are more likely to be employed and not retired. Additionally, they are more likely to be younger and have fewer financial resources than their non-LGBTQ counterparts. For example, 42% had incomes of $75,000 or more, compared to 55% for non-LGBTQ Americans.

Also, they tend to be single, despite living with a partner. Additionally, they are more likely to say they have poor or fair health and are more likely to say they consider debt a major or minor problem for their household compared to non-LGBTQ Americans in every income group.

When it comes to retirement confidence, LGBTQ Americans are less confident than non-LGBTQ Americans in believing they have enough financial assets to live comfortably in retirement, and they tend to retire earlier than ‘they never expected,’ Copeland said. Sixty percent of LGBTQ retirees say they retired earlier than expected, compared to 47% of non-LGBTQ Americans. This is true for the middle and upper income groups.

The most cited reasons for retiring earlier than expected are:

  • Have a health condition or disability unrelated to COVID-19.
  • Being able to retire earlier than planned.
  • Want to do something else.
  • Experiencing changes in their businesses that led to their retirement.

LGBTQ Americans and Retirement

Lisa Greenwald, CEO of Greenwald Research, said LGBTQ Americans in low- and high-income groups are more likely to agree that saving for retirement is not a priority compared to current needs compared to to non-LGBTQ Americans. In the high-income group, 39% of LGBTQ Americans agree that saving for retirement is not a priority compared to current needs, compared to 25% of non-LGBTQ Americans

Among the top financial planning priorities of LGBTQ Americans:

  • Saving and investing for retirement
  • Plan their long-term care and health care needs
  • Develop a strategy for withdrawing funds from their retirement accounts

But LGBTQ Americans are more likely to put other financial goals high on their list, including buying a home or reducing debt.

Getting advice is a problem

Despite these goals and priorities, LGBTQ Americans don’t know who to turn to or where to go for good financial and retirement planning advice, Greenwald added.

So where are they going? They tend to seek help from:

  • Family and friends
  • Online resources and research they have done on their own
  • Personal and Professional Advisors
  • Their employers
  • Online advisors

LGBTQ Americans are also less likely to work with a financial advisor than non-LGBTQ Americans. When working with one, they tend to look for one who is an ally to the LGBTQ community, Greenwald added. In fact, 63% of LGBTQ Americans say it’s important to work with a counselor who is an ally to the LGBTQ community, compared to 21% of non-LGBTQ Americans.

Additionally, LGBTQ Americans prefer a counselor who is affiliated with their employer in some way and has had similar upbringings or life experiences as they have, Greenwald added. They also prefer to work with a financial advisor who has a similar racial/ethnic background to theirs.

The 2022 survey of 2,677 Americans was conducted online from January 4 to January 26, 2022, with respondents aged 25 or older. The survey covered 1,545 workers and 1,132 retirees. This year’s survey included an oversample of approximately 807 completed surveys among LGBTQ people (639 workers and 168 retirees).

Ayo Mseka has over 30 years of experience reporting on the financial services industry. She was previously editor of NAIFA’s Advisor Today magazine. Contact her at [email protected]

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