DDespite the progress made by the LGBTQ+ community over the past decade in terms of legal protection, members of the community still lack equality when it comes to financial security. A recent survey conducted by the National Retirement Institute show that while 54% of the general US population were optimistic about their personal financial situation, only 41% of LGBTQ+ Americans had a positive view of their current finances. Nearly a quarter (24%) of LGBTQ+ Americans considered their personal financial situation to be poor.
Rona Guymon, senior vice president of annuity distribution for Nationwide Annuities, wrote in a blog post that members of the LGBTQ+ community were more likely to say they don’t have control over their day-to-day finances. Additionally, fewer LGBTQ+ Americans said they could absorb a surprise $1,000 expense, were on track to meet their financial goals, or felt secure about their financial future.
Although planning for retirement is a priority goal for everyone, fewer LGBTQ+ people give it a high priority due to the unique financial challenges and competing financial priorities of the community. Saving for experiences and paying off debt are more important financial goals.
One of those unique challenges that LGBTQ+ Americans face that impacts their financial priorities is workplace discrimination. Gay men and lesbian women report earning less than their heterosexual peers. Lower incomes mean less long-term savings, widening the financial readiness gap between LGBTQ+ Americans and the general population.
While Americans share common financial goals and face similar financial challenges, LGBTQ+ Americans lag behind the general population when it comes to knowledge on key financial topics such as saving, budgeting or building credit. Just over half (54%) felt well informed about retirement planning, compared to 67% of the general population. Just under half (45%) felt informed about investing in the stock market, compared to 53% of the general population.
Additionally, a majority of LGBTQ+ Americans believe that most finance professionals don’t understand the impact of these financial challenges on their lives. Seven in 10 LGBTQ+ Americans would feel more comfortable with an LGBTQ+ financial advisor or vocal ally.
This represents an opportunity for finance professionals to help LGBTQ+ clients focus on their financial future. Advisors should take the time to listen to their clients about their unique financial challenges and learn how these issues affect their overall financial situation.
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