Lesbian, gay, bisexual and transgender (LGBT) workers in the United States are outperforming LGBT workers in eight other countries with regard to their retirement readiness, according to a first-of-its-kind study.
LGBT: Retirement Preparations Amid Social Progress surveyed 900 LGBT workers and retirees in Australia, Brazil, Canada, France, Germany, the Netherlands, Spain, the U.K. and the U.S. to provide a detailed analysis of the retirement readiness of the LGBT community.
The study – a collaboration between the Aegon Center for Longevity and Retirement (ACLR), the Transamerica Center for Retirement Studies (TCRS) and Instituto de Longevidade Mongeral Aegon – found that LGBT workers in the U.S. achieved the highest retirement readiness score at 7.2, which is 1.3 points higher than the total score of 5.9 for LGBT workers across the nine countries surveyed.
The score is based on a scale of 0 to 10 using the Aegon Retirement Readiness Index (ARRI), which uses three measures based on attitudes (personal responsibility, retirement planning awareness and financial capability) and three measures based on behaviors (retirement planning, preparedness and required income replacement). The survey also inquired about approaches to saving.
LGBT workers in the U.S. ranked highest among the countries in the survey, but their ARRI score of 7.2 is still considered a “medium” score. LGBT workers scored slightly higher than heterosexual workers in the U.S., who received an ARRI score of 7.0.
Despite these findings, the report cautions that LGBT people continue to face a risk of not achieving a financially secure retirement compared to heterosexuals. While LGBT people and heterosexuals share similar retirement goals, the paper notes LGBT people remain vulnerable over family circumstances and workplace and health issues.
“Historically, the LGBT community has been a segment of the population most likely to retire in poverty. As a researcher, I am cautiously optimistic that the results of our survey point to an improving retirement scenario for today’s LGBT workers,” says Catherine Collinson, CEO and president of Transamerica Institute and TCRS, and executive director of ACLR.
LGBT workers in the U.S. also outperformed the nine-country total scores for all of the seven survey questions used to calculate the ARRI scores. Among the key findings:
- 84% feel personally responsible for making sure they have sufficient income in retirement, compared to 70% of global LGBT survey respondents;
- 79% feel very aware of the need to plan financially for their retirement, compared to 66% of global LGBT respondents;
- 46% think they are on course to achieve around three-quarters or more of their retirement income needs versus 38% of global LGBT respondents; and
- 61% say they are “habitual savers” who always make sure they are saving for retirement compared to 37% of global LGBT respondents.
Gender Differences
Meanwhile, differences in retirement readiness emerge when analyzing the survey findings by gender, as LGBT men apparently are faring better than LGBT women. According to the findings, LGBT men achieve a medium ARRI score of 6.2 compared to an average of 6.4 for heterosexual men. However, all women – LGBT and heterosexual – have lower ARRI scores, with LGBT women having an average ARRI score of 5.4, compared to heterosexual women with a score of 5.7.
The study emphasizes that despite recent gains in civil rights and workplace protections for LGBT people, there is still work to be done. “Even in countries where LGBT people are entitled to the same legal and civil rights as heterosexuals, the legacy of discrimination and prejudice means that many have been denied, or still do not have, the same employment and career opportunities as heterosexual people,” the study observes.
It notes that these factors can have a compounding effect over an individual’s career, leading to lower retirement savings, fewer vested government and employer benefits and an increased risk of living in poverty in retirement.
