This year's Retirement Confidence Survey (RCS), which measures the attitudes of workers and retirees on issues relating to retirement, found that LGBTQ Americans are less confident than non-LGBTQ Americans in believing that they have sufficient financial assets to live comfortably in retirement.
The survey conducted by Employee Benefit Research Institute (EBRI) and Greenwald Research for the first time included a sufficient sample of LGBTQ Americans to allow for an analysis of the challenges that LGBTQ workers and retirees face as they prepare for, and live in, retirement. The results of were presented in a recent webinar.
Craig Copeland, director, Wealth Benefits Research, EBRI, said roughly 10% of Americans identify themselves as LGBTQ. They are more likely to be employed and not retired. In addition, 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.
In addition, they tend to be unmarried, although they are living with a partner. Also, they are more likely to say that they have poor or fair health statuses and are more likely to say that they consider debt to be a major or minor problem for their households compared to non-LGBTQ Americans across each income group.
With regard to retirement confidence, LGBTQ Americans are less confident than non-LGBTQ Americans in believing that they have sufficient financial assets to live comfortably in retirement, and they tend to retire earlier than they had planned, Copeland said. Sixty percent of LGBTQ retirees say they retired earlier than planned, compared with 47% of non-LGBTQ Americans. This holds true for the middle- and upper-income groups.
The most cited reasons for retiring earlier than planned include:
Having a health problem or a disability that was not related to COVID-19.
Being able to retire earlier than they had planned.
Wanting to do something else.
Experiencing changes at their companies that led to their retirement.
LGBTQ Americans and Retirement
Lisa Greenwald, CEO of Greenwald Research, said LGBTQ Americans in the lower- and upper-income groups are more likely to agree that retirement saving is not a priority relative to current needs compared to non-LGBTQ Americans. In the upper-income group, 39% of LGBTQ Americans agree that retirement saving is not a priority relative to current needs, compared with 25% of non-LGBTQ Americans
Among the top financial-planning priorities of LGBTQ Americans:
Saving for, and investing for retirement
Planning for their long-term care and health-care needs
Developing a strategy for withdrawing funds from their retirement accounts
But LGBTQ Americans are more likely to place other financial goals at the top of their lists, including buying a home or reducing debt.
Obtaining advice an issue
In spite of these goals and priorities, LGBTQ Americans do not know who to turn to or where to go for good financial and retirement-planning advice, Greenwald added.
So where do they go? They tend to seek help from:
Family and friends
Online resources and research they did on their own
Personal, professional advisors
LGBTQ Americans are also less likely to work with a financial advisor than non-LGBTQ Americans. When they do work with one, they tend to seek out one who is an ally of the LGBTQ community, Greenwald added. In fact, 63% of LGBTQ Americans say that working with an advisor who is an ally of the LGBTQ community is important, compared to 21% of non-LGBTQ Americans.
In addition, LGBTQ Americans prefer an advisor who is affiliated with their employer in some way and one who has had a similar upbringing or life experiences as they have, Greenwald added. They also prefer to work with a financial advisor who has a racial/ethnic background that is similar to theirs.
The 2022 survey of 2,677 Americans was conducted online Jan. 4 through Jan. 26, 2022, among respondents age 25 or older. The survey included 1,545 workers and 1,132 retirees. This year’s survey included an oversample of roughly 807 completed surveys among LGBTQ individuals (639 workers and 168 retirees).
Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]