Two-thirds LGBTQ+ Professionals Struggling Financially And Living Paycheck to Paycheck, Reveals Study
June 13, 2022LGBTQ+ Professionals in the United States are less likely to be on track to meet their financial goals, absorb unexpected expenses, or feel confident in their ability to save for retirement compared to the general population, according to a new US Retirement Institute survey.
In fact, almost two-thirds of LGBTQ+ Americans report living paycheck to paycheck most of the time. That figure jumps to 72% for Black LGBTQ+ members. Additionally, only half of LGBTQ+ individuals report feeling confident in their ability to save for retirement.
According to the survey, LGBTQ+ respondents indicated they were less knowledgeable than the general population about important financial topics, including retirement planning (by 13%), estate planning (12%), and investing in the stock market (8%).
"As consumers face rising inflation, ballooning gas prices, soaring housing costs, and more, accessing sound and personalized financial advice becomes more important," said Rona Guymon, Senior Vice President of Annuity Distribution at Nationwide Financial. "That's especially true for LBGTQ+ individuals, who may face additional challenges that take a toll on their finances."
In fact, two-thirds of LGBTQ+ Americans report they face unique financial challenges that most non-LGBTQ+ people do not. The research also revealed that:
- More than a third (37%) report that their career has been negatively impacted due to gender identity or sexual orientation and nearly half (46%) say that their opportunities for career advancement have been negatively impacted due to gender identity or sexual orientation. These challenges negatively impact LGBTQ+ individuals earnings potential, a problem that then compounds as they age.
- More than half (56%) believe that LGBTQ+ people experience higher healthcare and health insurance costs than non-LGBTQ+ people.
- Roughly half of LGBTQ+ Americans feel saving to start a family (52%) and finding housing (47%) are more difficult for them compared to non-LGBTQ+ people.
So how can the financial services industry better serve the LGBTQ+ community? Of LGBTQ+ Americans, 7 out of 10 report they would feel more comfortable with an advisor or financial professional who is a member of the LGBTQ+ community (or a vocal ally). Fewer than 4 in 10 (37%) feel that financial advisors understand their unique challenges, highlighting a major opportunity for advisors to better meet their needs.
To better support them in their personal finances and financial planning, LGBTQ+ members want to see:
- Improved benefits for unmarried partners (41%)
- Boomers are most likely to report that improved benefits for unmarried partners would be most beneficial (52%)
- Increased representation of their community in the financial services profession (34%)
- More awareness of bias and discrimination impacting the LGBTQ+ community in the financial services industry (34%)
The top financial goals for the LGBTQ+ community are saving for experiences such as travel and hobbies, paying off debt, and saving for retirement, in that order. "The first step and most important way advisors and financial professionals can better serve the LGBTQ+ community is to understand their unique challenges and concerns," said Guymon. "There are lessons we can all draw from this survey to better meet the needs of this community and many others."
Nationwide has also created resources to help advisors and financial professionals understand the needs of LGBTQ+ clients. "Members of the LGBTQ+ community should seek out self-identified LGBTQ+ advisors or financial professionals or those who are vocal and visible allies," Guymon added. "Look for financial professionals participating in the local Pride Parade or festival – or ask for referrals from others in the community to identify those who have a strong track record serving LGBTQ+ clients. You can also visit letsmakeaplan.org to search for an advisor with an LGBTQ+ client focus in your area.
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