The U.S. Supreme Court Decision striking down a provision of the Defense of Marriage Act that denied same-sex couples access to federal marriage benefits has prompted many gays and lesbians to marry and engage in financial planning.
So reports the Insured Retirement Institute in a November 2013 report, “Post-Windsor: Retirement Planning for Same-Sex Couples.” IRI commissioned Woelfel Research to survey same-sex couples in 13 states (plus the District of Columbia) that permit same-sex marriages to determine their reactions to the SCOTUS DOMA decision in 2013 and to gather information on their retirement and financial actions, attitudes and habits.
The report reveals that 95 percent of respondents view the Supreme Court’s DOMA decision as “very favorable.” Nearly half (46 percent) of unmarried respondents plan to marry as a result of the decision. And at least 40 percent of married same-sex couples say they are motivated to financially plan in light of the SCOTUS decision.
When asked how financial services professionals can best serve same-sex couples, 34 percent of survey respondents say “treat us like a heterosexual couple” and “understand we are like everyone else.” Smaller percentages want guidance respecting taxes and benefits (13 percent), desire that advisors understand the issues they face (10 percent), and want planners to “understand the laws” (8 percent).
Since the DOMA ruling:
- 53 percent of respondents have either been added/plan to be added by their spouse or have added/plan to add their spouse as a beneficiary to their defined benefit plan;
- 38 percent have made or plan to make changes to a will;
- 23 percent have added or were added to their spouse’s health plan; and
- 18 percent have filed amended taxes on prior year tax filings.
The study notes also that nearly two-thirds of the respondents do not have a financial planner. However, of those that do have a financial planner, they cultivate a lasting relationship with them.
More than six in 10 (61 percent) have worked with the same planner for five years or longer. Of these couples that are working with a financial professional, three-quarters have consulted their advisor for retirement planning.
Nine out of 10 survey respondents (87 percent) have money saved for retirement. Forty percent have saved $250,000 or more, but this is largely skewed toward those aged 55 and over.
Among the reports additional findings:
- The majority (78 percent) of respondents have added to their retirement savings in the past year. However, 40 percent have not calculated the amount needed to live comfortably in retirement, and 24 percent do not know when they will retire.
- Most respondents (83 percent) say that the tax deferral is an important characteristic of a retirement investment. The two most important investment traits are “rate of return” and “past performance” of the investment.
- About half (48 percent) of respondents say they believe they will have the same or less financial security in retirement than their parents. This is driven by those under age 55 (53 percent).