The LGBTQ+ Retirement Gap: How to Find Forgotten Accounts & Save Thousands

TPIR Ep 101 Full Show.mp3: Audio automatically transcribed by Sonix

TPIR Ep 101 Full Show.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker 1:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker 2:
Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the Lgbtq+ community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom so you and your loved ones can have the retirement you've always dreamed of. A retirement you can take pride in, no matter who you are, where you're from, or who you love. So now let's start the show. Here's Matt McClure.

Speaker 1:
Well, hello there and welcome to another edition of Take Pride in Retirement. Matt McClure here with you, your host, your advisor, your friend, your pal and your confidant. Thanks so much for joining me. Really do appreciate it. As always, each and every time we're able to get together, you know, this is the show where we help Lgbtq+ individuals and couples build secure and authentic retirement futures. Um, it's a great thing that we're doing and I'm thankful to you for being a part of it. Uh, you might notice if you are watching on the old YouTube machine that I'm kind of in different confines this time around. Uh, it's a, it's a new office slash studio and I'll be coming to you here, uh, from here every once in a while and from my usual spot every once in a while as well. I like to mix it up. I like to keep you guessing. And so, uh, yeah, that's kind of what's going on right now. Everything. I'm still in setup mode here. So if things kind of go off the rails, you know why? Uh, but, but hopefully that's not going to happen. Fingers crossed. Uh, it's early days though, so be prepared for anything. But no, I really do. Thank you so much. You can schedule a 100% complimentary consultation with me, by the way, about any of the issues that we talk about here on the show.

Speaker 1:
Just give me a call 85524692178552469211. You can also go to take pride in retirement.com take pride in retirement.com once again is the website and you can schedule a consultation there directly into my calendar. It's free of any cost or any obligation. This time around we are talking all about spring cleaning for your finances, decluttering your retirement plan. I've done kind of a similar thing on the show in the past, in the springtime or right as we get into spring, but this time I want to take kind of a different approach to it. So yeah, just hang out and we'll, we'll get there and, and you'll see exactly what that different approach is going to be. But also, by the way, the thing that you can do at our website is not only scheduling a free consultation, you can also go there and find previous episodes of the show. If you're watching on YouTube, as I always say at the beginning of every episode now, thank you so much. Please like the video, subscribe to the channel. It really does help spread the word about all the great things that we're doing here and just search for take Pride in Retirement on YouTube. If you want to see full episodes of the show highlights, all of the above. And of course, you can reach out at any time with any questions that you might have. So today, again, talking about spring cleaning for your retirement accounts.

Speaker 1:
And this is especially important for our community, 57%, 57% of Lgbtq+ individuals earn less than $50,000 a year, compared to just 34% of the general population. That's from Voya Financial, where we get that statistic there from June of last year. And that means every dollar we save needs to work harder for us. And today we're going to cover why LGBTQ plus folks face unique retirement savings challenges. We're going to talk about how to find those forgotten 401 S, those orphaned 401 S, the things that you may have forgotten about, maybe other retirement accounts that are sitting out in limbo somewhere. We're also going to talk about hidden fees that could be eating away at your retirement dreams. Also, some simple steps to consolidate and optimize your accounts. Let's dive right in and talk about the Lgbtq+ retirement gap and why it really matters. I mean, you know, before we kind of go into cleaning up the accounts, let's talk about why the accounts might need some cleaning up and why it's so crucial for our community. Um, more than half of Lgbtq+ folks have less than $5,000 in savings. 20% have no savings at all. It's that same Voya financial, um, article that we, uh, got that information from just 50% of LGBTQ respondents to this particular survey said that they can pay all their bills in full, just half.

Speaker 1:
And that leads to fees. That leads to lower credit scores. So that in and of itself really highlights why this is so important for our community. Nearly two thirds of us live paycheck to paycheck. 52% have less than $10,000 in personal savings. That is compared to 43% overall. That's from Mercer. Lgbtq+ individuals earn approximately $0.90 on the dollar compared to the hetero and cis counterparts. So, I mean, you can see this is a big, big issue. Why does that gap exist? You might say, well, workplace discrimination is one, uh, 39% of people in our community reporting workplace discrimination, 42% report some sort of harassment in the workplace, according to the American Society on Aging. Career interruptions. Um, I've spoken about that kind of at length here on the show before. Um, from, from, you know, coming out or being found out maybe transitioning as well. Less family financial support in general because, you know, you may have a family that's got issues with you and who you are. And so you don't have as easy of a time getting that family financial support. Higher costs for family planning when you desire that kind of thing. Historical barriers to employer sponsored retirement plans and other things. Even healthcare coverage in the past. But the good news is, as I always emphasize here on the show, we can take control of what we can control. And that starts with finding each and every dollar we have saved and making it work harder.

Speaker 1:
You have worked plenty hard for that money. Let it work hard for you now, right? Make sure it is working just as hard for you as you have worked for it. Bottom line. And once again, going to take pride in retirement. If anything that we're talking about here on the show today really, um, just hits home for you and you want to explore more, maybe about your own personal financial situation and maybe about how I can help you improve that situation. Take pride in retirement. Com and so one of the big things that you might want to do if, um, you have worked multiple places in your life and of course, you know, I talked about career disruptions. That's a big, uh, thing, of course, in the community and I've experienced that myself, uh, because of discrimination and, and just, you know, even if it's not discrimination, even if you just moved around or changed jobs quite a bit, if you work in an industry where that tends to happen and it has happened to you, look back and make sure that you haven't forgotten about those old retirement accounts that may still be sitting around at an old workplace where you were employed ten, 15 years ago. Hey, 1 to 2 years ago. So a shocking statistic on this is that more than $2 trillion in 401 K assets are held in old forgotten accounts across the US.

Speaker 1:
And for us in the community who may have changed jobs due to that discrimination or relocated for acceptance, that can be even more common. And so, you know, why do these accounts get forgotten? Well, if you change jobs, especially if you leave due to discriminatory things that have happened, then you are more likely, at least in my experience, to forget about that account. Because, you know, with all the upheaval that's happened and all the emotions that are involved, it just kind of falls off the radar. Maybe you've moved cities or states for acceptance for community. Maybe you've just not updated contact information after transitioning or even after just moving or changing jobs. And that correspondence to you doesn't get to you to say, hey, this account's still out here, do something with it. Maybe it just doesn't get done because life happens, right? Ignoring paperwork during a life transition. Because things can fall through the cracks. We're human after all. Small balances that seemed not worth tracking. You know, maybe you had a few hundred bucks 15 years ago when an account. Well, if that account has performed like the S&P 500, that is, um, it could be several thousand in there by now. Just make sure that you've got those T's crossed, those I's dotted and make sure that you look for those old accounts.

Speaker 1:
And so how to find your lost retirement money. Well check your email go through. I mean, even if you have, uh, you know, your spam folder set to. Don't let anything through that I didn't send myself. Go through that email and search for old statements. Even check the snail mail. Make sure that you know. Even if the balance seems small years ago, uh, just check through. Maybe some old mail. Make sure you didn't miss anything. Contact those former employers. You know, give them a ring. Call the HR department at the place where you used to work and say, you know, they can they can be like, okay, here's the plan administrator for that. Even if it's changed over the years, you know, maybe since you've you've worked there, it was administered by XYZ company. Now it's administered by ABC company. Well, they can direct you to the right place so that you don't have to go on some fishing expedition. You can also use the National Registry of Unclaimed Benefits, unclaimed retirement benefits.com, unclaimed retirement benefits.com. You can also search unclaimed property databases. Missing money.com is another resource for that that you can look through those public records and take a look back at your old tax returns. I mean, look for those 1099 R forms if you've got those from, you know, previous employers from previous years, if you've hopefully got those, you know, stashed away somewhere that you can access them easily, go through, look for those 1099 R forms and that'll have the information for that particular account.

Speaker 1:
Then you can go and make sure, did I actually do something with this? Is it just sitting there? Has it been sitting there for all of these years? There are also some other apps and things like that out there that you can use to find these old accounts. A lot of them you might have to pay for, but the ones that the, the ways that I just listed off there for you are free. So I mean, again, those couple of websites, uh, unclaimed retirement benefits.com missing money.com, uh, as well, a couple of free resources there for you so that you don't have to spend money to find your money. And that would be a very nice thing. And so once you do find them, remember this if you remember nothing else, 39% of upper income Lgbtq+ individuals report that retirement savings has not been a priority. 39% of upper income folks in our community say that retirement saving is not just just not a priority for them. That, surprisingly to me, is 14 percentage points higher than non Lgbtq+ peers. And that's a statistic from Edelman financial engines. So you got to remember that. Keep that in mind because this could be something that if you have if it's not been a priority for you, if it's something that has not been paid attention to over the years, it could be a good resource for you to jumpstart that retirement saving that you have maybe fallen behind on or thought you fell behind on, depending on how much you've left in that old forgotten 401 K or other retirement account.

Speaker 1:
So a couple of options here for you. For those old accounts, one, you can just leave it where it is that I wouldn't recommend generally to anybody because of, you know, the fees that might be involved. The asset allocation there usually doesn't match what is good for you anymore because so much time has passed potentially. So I wouldn't leave it where it is. Although that is an option. You could roll it into your current employer's 401 K if they accept those rollovers that are incoming. My advice to I think most people would probably be, and it depends on your situation and, and all the different aspects of your situation. But my general sort of recommendation might be to roll it into an IRA. And that could be because of, you know, especially, um, working with with us, their generally lower fees involved. The because of our management style of IRAs. So you have you also have more control over the investments. I mean, just you could have like granular control over the investments compared to like a 401 K. You can set sort of a general asset allocation usually.

Speaker 1:
And that's kind of it. Um, the other option would be to cash out that money. I would avoid that unless there is some type of emergency and you need those funds and there's no other option for you. You could cash it out, but you will pay taxes on that money and you will pay penalties on that as well. So I would avoid it. If you've got an old abandoned 401 K, you don't know what to do with it. You think maybe you want to put it in an IRA, then I can help you through that process. Take pride in retirement. That's. Take pride in retirement. That's the website. You can also call me 855246 9211. So there are also some hidden fees. Stealing your retirement. And you've got to be aware of that. And especially, you know, springtime is a time of renewal. So why not renew your focus on your finances? Why not renew your focus on cleaning up your finances and getting rid of fees that you don't need to be paying or you don't know you're paying is huge. And so, you know, being aware of those fees is being aware of your wealth, is being aware of your finances. You know, when you're already earning just $0.90 on the dollar, you can't afford to lose another chunk to those unnecessary fees. So common hidden fees to look for management fees, those can range up to about 2% from about half a percent a year.

Speaker 1:
Administrative fees for things like record keeping, legal services, trustee fees, their individual service fees for like loans and distributions and that kind of thing. They're also investment expense ratios. Those are built into mutual funds and expense ratios, kind of the overall fee that you're going to pay. But if you're just looking at a mutual fund, then the fee that you're paying on that particular fund is known as your expense ratio just for that fund. And so you want your expense ratio to be as low as possible. And fees matter quite a bit because, you know, say, oh, well, I'm just paying a 1% fee. That doesn't sound like much on the surface, but over 30 years and $100,000 account, it could cost you over $50,000 in growth, give or take. So yeah, it's a big deal. So if you're paying too much in fees or you don't know how much you're paying in fees, there are some things you can do and should do. One is to request a fee disclosure statement from every retirement account. That way you can get a look. What fees am I actually paying on this account? You can compare expense ratios, look for, you know, index funds, maybe that have an expense ratio that's less than, you know, 2/10 of a percent kind of a thing or whatever, you know, level you kind of want to set for yourself, work with an advisor and make that an easier thing for you.

Speaker 1:
Go to take pride in retirement and we can actually tell you what you're spending right now as far as your, your expense ratio goes, as far as your fees. And we can, chances are lower those fees and chances are we can do it quite significantly as well. Consolidate those accounts to reduce multiple fee layers. You got some fees over here, some fees over there, and they all kind of, you know, add up and, and just mean more and more fees on your money and ask about fee based versus commission based advisors. Those are two different things. There's two different ways that people in this line of business can make money. And, you know, I operate in a, in a way where I act in a fiduciary capacity. So I am bound legally and morally to watch out for your best interest, not the best interest of my pocketbook or my my wallet. And I got a fancy pocketbook. No, I'm just kidding. Uh, but, uh, you know, it is, uh, a situation where I have to work in your best interest, not my own. So that's really what that comes down to. And 63%, this is according to that, that Mercer study that referenced a bit earlier, 63% of LGBTQ plus Americans prefer working with a professional, uh, financial professional who's a member of or an ally of the community.

Speaker 1:
So don't be afraid to reach out to this advisor, certainly, and ask about my experience with Lgbtq+ clients. Hello. I'm not only a member, I'm also a client. Uh, but we, you know, we have unique needs and, and working with someone who understands that can really ease a lot of the concerns that you might have, right. So another thing that you need to be considerate of is those. I mentioned this just briefly, but I'll dive into it for just another minute here. Those outdated asset allocations, you know, spring cleaning is not just about finding those old accounts. It's about making sure they're still working for you. If it's been sitting there in an old 401 K, if all that money's been sitting there in that old 401 K, the accounts sometimes maybe have just defaulted to conservative investments over time. If it's been given no guidance as to what to do. It just goes to the most conservative option. Maybe the portfolio hasn't been rebalanced in years. If it's just been sitting there, chances are that's the case. Maybe there's too much company stock from your former employer. That tends to happen quite a bit. The asset allocation also may not match your current age and your current risk tolerance. That happens very often. And so just take, you know, ten minutes and sit down and say, okay, what percentage is in stocks versus bonds? Are you properly diversified across different sectors and in different types of accounts as well, not just within that one account, but overall in different accounts? Does your allocation match your timeline to retirement? And have you rebalanced in the past year? If you don't know the answer to any of those questions, reach out to me.

Speaker 1:
If those questions make your eyes glaze over and you don't know what in the world is going on with life after you've asked those questions of yourself. Reach out to me. Take pride in retirement. Take pride in retirement. Call (855) 246-9211. And I will be glad to run a deep dive analysis on your financial situation and answer all of those questions and any others that you have, and we'll get that spring cleaning done for you. You know, as you head into this season of renewal here. Well, so today on the show, we have covered why LGBTQ plus individuals face unique retirement challenges, how to find those forgotten accounts, identify hidden fees, and you know how to check your asset allocation as well. And so you got some homework. Make a list of all the employers that you've worked for. If this is a situation that applies to you, search for those old retirement accounts. Request the fee disclosure statements, check your asset allocation, all of those things.

Speaker 1:
And if you want help, again, go to take pride in retirement. Take pride in retirement. Schedule a consultation. There a couple of different ways on the website that you can do that. One of them is by clicking get your plan up at the top of the page. And if you do that, then you can get a free e-book called the Smart Retirement Plan, written by a great colleague of mine. I wrote the afterword for that book, and I would be glad to give you a free copy of that in an ebook form, and it's got a lot of great useful information in it. All right. So next time around, we're going to tackle some estate planning stuff for Lgbtq+ folks. And why outdated beneficiaries? Oh boy, those can be so dangerous for anybody, but especially for our community. How to protect you and your partner, your chosen family. And remember this. You know, I don't want everything to be, uh, negative at all. Um, but while we do face some systemic challenges, every step you take toward organizing your retirement is an act of pride and self-determination. So call for that free consultation. 85524692178552469211. Or go to take pride in retirement.com. I want you to have the retirement you deserve a retirement that you can take pride in. All right. Well that is going to do it for this edition of the show. Until next time, take pride in yourselves and take care of each other. We'll see you then.

Speaker 2:
Thanks for listening. To Take Pride in Retirement. Members of the Lgbtq+ community deserve to work with the fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call (855) 246-9211 or go online to take pride in retirement.com. Investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor, BCM and Active Wealth Management Incorporated are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.

Speaker 1:
Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest, please refer to our firm brochure, the ADV Too-a item four for additional information.

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