In its 2012 LGBT Financial Experience Study, Prudential reported that LGBT respondents about their most pressing financial concern, the most common response was “retirement.” Respondents to Prudential’s 2016-2017 Study were “less likely to have started saving or investing for retirement . . . than those surveyed in 2012.”
Success is still ours. What can younger queer people do today to prepare for retirement with time on their side? What can older queer people do when they feel they’re in crunch mode?
Pay off debt
The number two financial concern of the queer community is paying down debt. Debt anchors our future to our past, so don’t sacrifice tomorrow for today.
Many retirees today are finding it harder to survive on retirement savings and Social Security because they have too much debt. For example, 30% of Americans 65 and older had mortgage debt in 2011. In 2001, only 22 percent of Americans 65 and older had mortgage debt. If you’re young with a low-interest rate mortgage loan, it may not make sense to pay off your debt instead of saving for retirement. But, have no mortgage debt by retirement.
Likewise, the Government Accountability Office reported in 2016 that Americans 50 years of age and older are having Social Security checks garnished to repay long-held, defaulted student loans. To avoid future garnishment of your Social Security checks, make paying off your student loans a priority.
Grow your cash flow
Robert Kiyosaki, of Rich Dad/Poor Dad, says wealth is when you have enough investment income to cover your expenses. There are three ways to create and grow investment income.
First, there are paper assets: stocks, bonds, mutual funds. Second, there are real estate investments, whether paper assets through REITs or physical properties. Then, there are personally owned businesses.
Todd Tresidder of The Financial Mentor believes that with this three-pronged approach, even those who have waited until their 40s or 50s to prepare for retirement can adequately prepare for retirement.
Get a financial planner
If you don’t have a financial planner, get one. Prudential’s 2026-2017 study showed that fewer queer people use a financial planner than the general population. However, an HSBC study showed that individuals with a financial planner have nearly 29% more in retirement income wealth than those without one.
To be sure, having a financial planner won’t make you rich, but not having a financial plan may cost you thousands over your lifetime. A 2012 CFP (Certified Financial Planners™) Board study showed that “the more extensively households plan, the better prepared they are financially in terms of their likelihood of saving, investing, and managing credit card debt.”
If you’ve procrastinated on retirement planning, don’t procrastinate any longer. By focusing on these three areas, you can make your biggest impact on your financial future. Whether you’re younger or older, though, starting your financial planning now is always the best strategy.
