LGBT adults better prepared for retirement, survey finds

Gays are more confident than the average investor that they will have saved enough to enjoy retirement.

In a new survey, about 61% of those who identified themselves as lesbian, gay, bisexual or transgender investors said they expect to have saved enough by the time they retire to live the rest of their lives in their desired lifestyle. A comparable survey of the general population found 53% expect to have saved enough for retirement, according to Wells Fargo & Co., which sponsored the survey.

In addition, a lower percentage of LGBT pre-retirees expect retirement to include some work. About 36% of LGBT adults said they assume they’ll have to work during retirement in order to afford their lifestyle, compared with 41% of the general population.

“The confidence level is built into the fact that they have more discretionary spending and a higher ability to aggressively save, as well as a lower level of debt than the average American,” said Kyle Young,, a Wells Fargo financial adviser whose team manages $135 million of assets for about 300 LGBT households.

LGBT adults tend to have higher than average incomes and are more career-oriented because they are not as likely to have children, Mr. Young said. Even those couples who are raising children tend to have smaller than average families, he said.

Those LGBT adults who aren’t raising children also may feel more pressure to save for retirement because they recognize they won’t have the family support structure in place that a couple with kids may, said Jeremy Gussick, a financial adviser in Cherry Hill, N.J.

“They don’t have the kids or grandkids to someday depend on,” said Mr. Gussick, an adviser with LPL Financial LLC. About 70% of his clients are LGBT individuals or couples.

Gay adults also are somewhat better prepared for retirement than the general population, according to the survey, which was released Wednesday.

The median amount that LGBT survey participants have saved is $150,000, 17%, of the $900,000 they expect to need. The average American has saved about 13% of the anticipated needed amount, according to Wells Fargo.
Same-sex couples, much like unmarried couples, face additional retirement challenges that require enhanced planning.

“Many retirement benefits — from Social Security to pensions — still do not have inheritance rights for partners who are not recognized on the federal level as spouses,” Mr. Young said.

One planning technique would replace the Social Security income that is lost when a partner dies with benefits from a life insurance policy, said Mr. Young, who is one of Wells Fargo’s 100 advisers who have attained the accredited-domestic-partnership-adviser certification.

Mr. Gussick also has the ADPA accreditation, which began as a program of Wachovia Corp., now Wells Fargo. It became available to all advisers in November 2010.