Data & Research July 28, 2017

LGBTQ Americans Need Help With Retirement Savings and Finances

More than half (53%) said they are unsure where to go for financial advice, a MassMutual survey finds.
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Lesbian, gay, bisexual, transgender, queer or questioning (LGBTQ) middle-income Americans are more likely to feel less financially secure and struggle more with personal financial issues than other Americans, according to research by Massachusetts Mutual Life Insurance Co.

When it comes to retirement, 70% of LGBTQ Americans say they are behind on saving for retirement, compared to 63% of the general population. Those identifying themselves as LGBTQ were more likely to agree that “spending money to enjoy myself now is more important than saving for the future” than other Americans, 36% to 27%, respectively.

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Fifty-four percent of LGBTQs reported they wish their employer provided more education about retirement savings, and 40% said they don’t understand how to save and invest for their situation.

As for general finances, 27% of LGBTQ respondents have at least $5,000 in savings set aside for emergencies, and 44% said an unexpected expense of $5,000 would create at least some, if not significant, discomfort. Both those levels were higher than reported by the general population.

Managing finances is also more of a challenge for the LGBTQ population, with 59% saying they don’t always have enough money every month, compared to 48% of the general population, the study found. Half of LGBTQ workers with lower incomes (less than $45,000) found it difficult to manage their household expenses. Both LGBTQ (54%) and the general population (53%) attributed personal financial issues to high levels of debt.

LGBTQ Americans also expressed concerns about having different financial planning needs than the average household, more difficulty finding financial support and greater interest in financial education. More than half (53%) said they are unsure where to go for financial advice.

“The financial services industry needs to continue to get closer to its customers to better understand their individual needs, as MassMutual’s study of LGBTQ middle Americans plainly shows,” says Wonhong Lee, head of diverse markets with MassMutual. “There are many different types of households and families in America. Both our challenge, and our opportunity, is to better understand how we can help all types of households and families prioritize managing their money, enhance their financial security and reach their financial goals.”

The research polled 500 respondents who identified themselves as LGBTQ as part of a broader study of working Americans ages 25 to 65 who earned annual incomes between $35,000 and $150,000.

Compliance July 28, 2017

Treasury Announces End of myRA Program

American taxpayers have paid nearly $70 million to manage the program since 2014, the department said.
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The U.S. Department of the Treasury announced that it will begin to wind down the myRA program after a thorough review by Treasury found it not to be cost effective.

The myRA program was launched in 2015 as a way for individuals to set up automatic direct deposit contributions to myRA through their employer, fund a myRA account directly by setting up recurring or one-time contributions from a checking or savings account, or at tax time, direct all or a portion of a federal tax refund to myRA. The program required an initial contribution of at least $25 and automatic ongoing contributions of $5 or more every payday.

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The Treasury Department’s review was undertaken as part of the Trump Administration’s effort to assess existing programs and promote a more effective government. The department said demand for and investment in the myRA program has been extremely low. American taxpayers have paid nearly $70 million to manage the program since 2014.

“The myRA program was created to help low to middle income earners start saving for retirement,’ said Jovita Carranza, U.S. Treasurer, in the announcement. “Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified by the assets in the program. Fortunately, ample private-sector solutions exist, which resulted in less appeal for myRA. We will be phasing out the myRA program over the coming months. We will be communicating frequently with participants to help facilitate a smooth transition to other investment opportunities.”

A myRA Program Update on the Treasury Department’s website says existing accounts will remain open and participants can continue to manage their accounts until further notice. During this time, participants will be able to continue making deposits and their accounts will continue to earn interest. The department will notify participants over the coming weeks of next steps and relevant deadlines regarding the transfer or closure of their accounts.

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