Compared to other retirees and pre-retirees, lesbian, gay, bisexual, transgender, queer or questioning (LGBTQ) Americans are more likely to take bigger risks when investing for retirement—even when they believe they need to be preserving their retirement savings, according to a new study from Massachusetts Mutual Life Insurance (MassMutual).

At the same time, LGBTQ retirees and pre-retirees were more likely (42 percent) to say they should be more conservative with their money as they approach retirement than to say they should be investing more aggressively (28 percent), according to the MassMutual LGBTQ Retirement Risk Study.

However, acknowledging the need to preserve retirement savings has seemingly had no effect on the group’s investment approach: 60 percent of LGBTQ retirees and pre-retirees surveyed described their investment mix as growth-oriented over preservation-oriented (as compared with 52 percent of the general population), according to the report.

“MassMutual’s study shows that many LGBTQ retirees and pre-retirees may benefit from consulting a financial advisor about their retirement investment goals, something less than half currently do, and may benefit from help leading into retirement and securing their finances through retirement,” said Catherine Cannon, head of personal markets at MassMutual.

“Of those respondents in our study who do work with a financial advisor, six in 10 say their advisor has encouraged them to change their investment mix and 87 percent of those folks were advised to become more conservative as they enter retirement,” she added.

The study found that although LGBTQ respondents are taking more risk, nearly one-third (31 percent) of the group recognizes they might be taking on more risk than they should (as compared to 22 percent of other retirees and pre-retirees).

Both LGBTQ respondents overall and more specifically LGBTQ retirees have their sights set on performance: 17 percent of both groups said they want their retirement investments to substantially outperform the market, according to the report. Only 9 percent of retirees in the general population shared that perspective.

Overall, LGBTQ pre-retirees plan for a longer working life and a shorter time in retirement. The group also expects their retirement income will last as long as they will need it. The general population of retirees and pre-retirees expect to live 24 years in retirement, the study found. 

The aggressive investment strategy and performance expectations of LGBTQ retirees and pre-retirees may stem from their elevated confidence in their retirement security. For example, LGBTQ retirees and pre-retirees were more confident (68 percent) than the general population of retirees and pre-retirees (62 percent) that they will be able to meet their retirement lifestyle goals. The group was also more confident then the general population of retirees and pre-retirees of their knowledge of how to optimize their Social Security income (74 percent compared to 68 percent, respectively).

The majority (52 percent) of LGBTQ retirees and pre-retirees said they are not worried about financing their retirement, making them more confident than retirees and pre-retirees (46 percent), according to the report.

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