All investors are faced with complex challenges when it comes to retirement, and Lesbian, Gay, Bisexual and Transgender (LGBT) investors face the same challenges as well as several unique ones, including those stemming from a lack of federal marriage and inheritance rights. As part of our ongoing retirement study, Wells Fargo specifically sampled more 1,000 LGBT consumers to see if there were differences in confidence across respondent types related to retirement. Some differences were found, but my feeling is the similarity of lack of appropriate savings spans all Americans.
On one hand, LGBT non-retirees reported a higher level of confidence in their retirement savings, compared to the general population (61% versus 53%). However, on the side of challenge, only 17% of LGBT non-retirees reported saving what they believe they actually need. For example, they feel they need to save at least $900,000 to retire, and have saved closer to $150,000. Despite this need to save more for retirement, three out of five (62%) of those surveyed have not increased their retirement savings allocation in the past year. And, only 25% currently report having a detailed written financial plan for their retirement – something that 100% of all Americans need. Despite your orientation, the need to save and the likelihood that you are not doing enough, is universal.
I know there has been ongoing debate across all segments and families of “what is my proper savings number?” The answer varies by each individual. My thinking is no matter how much you are saving, you need to plan to increase that number. If you are at 6% consider moving to 10%, if you are saving 15% consider moving to 20%. Based on the advice of my advisors, my family saves 25% and it took many months to get used to that level of savings. So my message is to stretch your savings as much as you stretch yourself in other areas of your life. It is my best approach to an uncertain future.
Source: Wells Fargo LGBT Retirement Survey 2012