June 14, 2012 at 9:42 am EDT | by WBadmin
State of the American family


American families have weathered economic shifts, but the downturn of 2008 has affected families’ finances, and their relationships to their finances, in unforeseen ways. Families of all kinds are working hard to balance their many long-term expenses.

LGBT families face the same struggles that all American families are currently facing: the need to provide for their children’s education, managing their finances, taking care of family members, all while trying to save and plan for their own retirement.

In an effort to better understand what families are most concerned with, Massachusetts Mutual Life Insurance Company (MassMutual) completed the second nationwide study in its State of the American Family series. This was conducted by Forbes Consulting Group.

The research reveals that while LGBT families share some similar concerns with the general population, this community is well poised to achieve financial success.

The survey involved a 20-minute online questionnaire administered to 1,143 respondents. The sample included parents, ages 30-64, with household income of $100,000 or more. LGBT families as a group are in a relatively strong financial position with an average household income of $162,000 and average savings and investable assets of $285,000. When real estate and business interests are included, the value of their assets rises to $440,000.

Ninety-five percent of those surveyed say their spouse/domestic partner contributes financially to household expenses (vs. 79 percent of the total population) and 21 percent of those surveyed work two jobs (vs. 9 percent of the total population).

Reflecting the recently enacted same-sex marriage laws in some states, 40 percent of surveyed LGBT families are legally married; 60 percent have legally recognized domestic partnerships (primarily through civil unions). Although they are less likely to have combined all their finances (43 percent vs. 62 percent general population), they are more likely to make financial decisions jointly (58 percent vs. 50 percent general population)

Many LGBT families (40 percent vs. 34 percent general population) feel they are expected to take care of their parents when they no longer can take care of themselves. As a group, LGBT families are significantly more involved in assisting their parents and in-laws:

33 percent are primarily responsible for managing parent’s or in-laws finances (vs. 21 percent general population)

23 percent currently providing hands-on personal care assistance to parent/in-law (vs. 9 percent general population)

36 percent currently providing hands-on routine chores for parents/in-laws (vs. 23 percent general population).

Feelings about finance and financial literacy

LGBT focus for planning for the future is underscored by their higher rates of ownership of long-term planning products.

• 69 percent own mutual funds (vs. 51 percent general population)

• 95 percent own a retirement account (vs. 86 percent general population)

• 26 percent own annuities (vs. 17 percent general population)

• 35 percent own long-term care insurance (vs. 23 percent general population)

This pattern is consistent with their attitude toward planning: 69 percent say they try to influence the future with their day-to-day behavior (vs. 50 percent general population)

Despite their better than average financial situation, LGBT parents are less likely to give themselves credit for planning ahead:

• 34 percent say they should be doing more to save for the future but right now are struggling to get by (vs. 22 percent general population)

• 47 percent say that investing and financial planning should be a higher priority (vs. 33 percent general population)

Accordingly, LGBT parents tend to be particularly proactive with regard to personal finance.

While parents want to help pay for their children’s education, 57 percent of LGBT families believe that saving for their children’s college education is important to them so they can live the “American dream.” However, in order to make their children’s education vision a reality, parents will need to place a greater emphasis on long-term planning:

• 42 percent say they know they should be saving for their child’s education but they don’t have the money to invest now (vs. 24 percent general population)

Plans for retirement

LGBT families place a greater emphasis on traveling during their retirement years than do Americans as a whole. Consistent with the American population overall, the majority of LGBT families (61 percent) feel that financial security for retirement is an individual’s responsibility. Accordingly, 71 percent have estimated the amount of savings needed for retirement (vs. 65 percent general population). More than one third (36 percent) are confident they are doing a good job of preparing for retirement (vs. 30 percent general population), yet 49 percent worry about outliving their retirement savings (vs. 30 percent general population), consistent with their long-term focus.

LGBT respondents assume that personal savings will contribute a smaller share of their retirement income, and are twice as likely to believe that they will definitely work in retirement (34 percent vs. 17 percent general population).

MassMutual has been helping customers with their financial needs for more than 160 years. As a mutual company, we focus on providing long-term value for our policyholders. We have always believed that good decisions are the foundation of every sound and secure financial future. We also believe when choosing a company to work with, ownership, strength and stability matter.

Michael Glassman is a registered representative of and offers securities through MML Investors Services, LLC, member SIPC. Reach him at 301-581-7277 or mglassman@financialguide.com.

  • These studies resonate with those of us who are in the long term care (extended care benefits) insurance business.

    It is not resonating with the consumer because we are explaining the facts, figures, and statistics to people who feel and think emotionally.

    It is my experience that many people are in denial, unconscious, or not emotionally engaged with the concept of care giving and the consequences. That is the operative word “consequences.” It is not the person who needs caregiving it is how caregiving effects a persons friends, family, money, and legacy.

    When people come to terms with those issues, they will be more agreeable to do long term care planning. There are several other issues which are not brought forward to the consmer:

    1. The consumer believes that all you need is a quote and then decide what plan to own. When they
    are telephoned to explain that there are underwriting and financial considerations and choices in
    plans they become annoyed and confused. This is not what they thought when they completed
    the information from a mailing or web site.

    2. Agents and financial writers comment that the affluent are fine to self-fund. They have sufficient
    assets to spend if they need any sort of care giving services. If that is the case, why do they
    own auto, home, life, property and casualty, health, umbrella policies, and other forms of insurance
    they are unlikely to use? They own insurance to transfer portions of the risk. That is how people
    retain and transfer wealth — they plan and have insurance plans to provide liquidity. Owning
    a long term care plan is another form of extended care benefit (which you are likley to need) to
    transfer the risk of care giving expenses to the insurance company. You then deploy your other
    assets for additional wealth, life style, or legacy planning.

    3. Caregiving. We are not doing as good a job in getting people to be aware of caregiving and how
    it will effect the caregiver as much as it effects the person needing care giving.

    Sometimes people do not realise they are in a caregiving situation until I ask them how much
    time they are helping a parent or loved one. They then come to terms that they are care givers.

    This is what care giving planning is about. Helping people to come to terms with 3 areas which arre important to them: their family, their health, and their money.

    If this is not important to you — spend your money on your life style and hope there are family or governmental resources available should you need care giving services. It is not just those who need care giving — family or social benefits will become part of your caregiving. What is your plan?

  • What about those of us who are unemployed or underemployed, working for hourly pay and living paycheck to paycheck? Who are those making $162K a year? My partner is getting just $1400/month on disability and I only bring home $1600/month from my job… I’m barely able to put $40 a month in my savings; we are behind 2 months on mortgage. We were doing pretty good until 2008. Now just under 15 years to retirement, we are both in our 50s and actually hoping we die before we are forced into social security; because there is no way we can save enough for any kind of retirement. By the way, I have $202.63 in savings. Try living on THAT every month.

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