Study: Gay Americans earn more, owe less, and are more prepared for retirement
New research has shown that LGBT people are better at managing money, as they earn more, are less likely to be in debt, and are generally better prepared for retirement than straight people.
A Prudential survey of over 1000 respondents discovered that gay, lesbian, bisexual and transgender people in the US were more likely to be prepared for retirement, earned more, and had less debt, reports CNN.
The survey found that on average LGBT people had a higher than average income; $61,500 (£38,500), compared with the national average of $50,054 (£31,200).
It also found that LGBT people carried, on average, around $4000 (£2500) less debt than the average US household, and had around $6000 (£3750) more in average household savings.
Unemployment within the LGBT community is even slightly less than average at 7%, compared to the national average of 7.9%.
Michele Meyer-Shipp, chief diversity officer at Prudential, talked about a “flow down” of factors, including education; that over half of LGBT respondents had at least a bachelors degree. Not only that, they were more likely to live in higher-income areas. She said:
“It flows down — you have a higher level of education, access to higher paying jobs in areas where there are good salaries, and more disposable income to allocate to things like saving and retirement.”
Ms Meyer-Shipp went on to say that the uncertainty surrounding the future of the LGBT community was also a factor which encouraged LGBT people to be more careful with their money.
She said the top financial concerns of people in the LGBT community included a lack of pension survivor benefits, Social Security, unfair tax treatment and legislation which can be harmful to LGBT people’s finances. Ms Meyer-Shipp continued:
“The LGBT community has unique concerns, so when you’re planning you’ve got to be more cautious about where you’re putting your money and how much you’re saving.”
The 1996 Defense of Marriage Act, currently under consideration by the Supreme Court, restricts LGBT people from receiving the same benefits as straight, married couples, including survivor benefits and some tax exemptions.
On Monday, the Supreme Court failed again to indicate its plans on hearings on equal marriage related issues. The court released an order list with no mention of the ten petitions pending review. If the court strikes down the law, such benefits would become available to LGBT people.
The results of the survey also went further to suggest that LGBT people on average built up more equity in their homes, with a median of $77,000 (£50,000), compared to the national median of $62,000 (£38,500).
Out of LGBT pre-retirees, aged 55-68, around 64% were saving for retirement in employer-sponsored retirement accounts, compared to just 53% in the general population.
Despite this, only 14% of LGBT respondents felt confident about their financial preparedness for retirement, compared to 29% of the overall population.
Not the first study to suggest LGBT people are better with money, a survey released earlier this year by Wells Fargo found that the median LGBT retiree had saved $450,000 (£278,000), compared with a national sample of retirees who had on average $350,000 (£217,000).
Census Bureau and Experian surveys have also come to similar conclusions, however a recent Gallup poll actually suggested the opposite, saying that, out of 120,000 adults surveyed this summer, LGBT people tended to have lower incomes, and to be less educated than the overall population.
Many think that the LGBT community is a lucrative, and untapped market on its own, because of the complex, and often unique nature of the needs of LGBT people.
Some financial institutions have begun to offer services specifically aimed at the LGBT community, however 63% of respondents to the Prudential research said specifically tailored services were not always available.
