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    How the LGBT Community Can Retire Early

    Your Dream LGBT Early Retirement is Waiting

    LGBT Guide to Early Retirement, You can do it!

     I was recently reading an article in Time Magazine which followed a few retirees who appears to be enjoying retirement in the Trailer Parks of Florida. The article asserted you could buy a “mobile home” for $10-40,000 depending on your budget. For many Americans who’ve failed to plan (or save enough) for retirement, this could be a good option.  This doesn’t sound appealing to me, and I would guess this isn’t appealing to you.  So here is the LGBT GUIDE to help you Be Fiscally Fabulous and retire early and retire well.  LGBT Early Retirement guide whether rich or poor can help you get on track for Financial Freedom.  That is the day that work becomes an option. Plan ahead so your only option for the “good life” doesn’t require you to live in a trailer park. Gay early retirement doesn’t have to mean a life of miserly living.

    I like to say Gays do it better, and I’d be over the moon if we could also translate that into early retirement for many in the LGBT Community.

    By David Rae Certified Financial Planner™, Accredited Investment Fiduciary™

    LGBT Guide to Retiring Early and Retiring Well.

    While Florida trailer park living appeared to be a good option for the people profiled everything about it screamed ‘don’t let this be me”.  I couldn’t think of anything less appealing or fabulous for my friends and peers than living in Trailer Park in Florida.  There are a few multi-million dollar luxury oceanfront communities in Laguna Beach and Malibu that I could make do with.

    Is a Fabulous LGBT Early Retirement even Possible?

    Yes, LGBT early retirement is possible for those who take the necessary steps.  The LGBT community has some financial challenges when it comes to money, but for those of us who are doing well, we also have many advantages.  When do you want to achieve Financial Freedom- you know the day work becomes an option – 45? 50? 60? 95?  I know plenty of people who’ve retired in their forties. I also know many more people who are likely to have to work forever.

    Take a moment and think if money were no object how would you spend your days?  Early retirement will mean something different for each person.  Many will take on a second career that is perhaps more enjoyable and less stressful.   Others will spend days on the beach, traveling, or drinking fine wine with friends.  Plan for and retiring may be easier to accomplish than you think.  Think of achieving financial independence rather than retiring.

    How early is your LGBT Early Retirement?

    When will you leave the workforce? ASAP? 35? 45? 55? 60? Never? Keep in mind the reasons that many people leave the workforce.  Rarely is it retiring when they have the financial means to maintain their lifestyles in retirement, but rather external forces are making the choices for them.  Nearly half of retirees leave the workforce earlier than they had planned according to the Employee Benefit Research Institute.   Some are suffering from illness, others are laid off.   Some are lucky enough to retire on their own terms and when they are ready.  Which way would you prefer?

    I may be a money nerd, but envisioning my future, and taking the financial steps to make it a reality is exciting to me.  Early retirement is possible but will take proper planning, time, and saving to make it a smooth transition. It will also take money to do all the things we are dreaming about during your golden years.  It is important to get started early- the sooner you start the easier the process will be.

     

    Set a Financial Roadmap to stay on track for your LGBT Early Retirement

    You don’t have to set a hard date to retire early, but having a target or simply planning to retire early can help you set up the proper accounts to fund the various phases of your retirement.  This is especially important if you want to retire before 59 ½.  Taxation and penalties can make typical retirement account tough to access early. Don’t fret there are tax planning strategies to sidestep these penalties.

    Magnify your Finances and Savings Plan

    The earlier you want to be financially free the less time compounding has to work its magic. This may mean more saving on your part.  Similarly, with less time to accumulate a nest egg to live off the more, you will need to save per year as well. Accumulating the first million is always the hardest. Best advice is to get started now. If you’ve already started start ramping up your planning.

    Look for ways to live below your means so you can put away large portions of your income.  Pay yourself first, and look to put away 30% of your income or more depending on how early you want to retire.  Side note: the more you save, the less income you will need to replace in retirement.

     Live Well and Still Save

    There are tons of ways to still live well and save huge amounts of money at the same time, without cutting back.  I spent 20 minutes on the phone with my cable company which is saving me $70 per month for the next 2 years.  That totals out at $1680, and I now have a better cable package.  Airlines Miles allow me to fly first class in lie-flat seats to Europe every year practically for free.

    You can drive your luxury cars, just get off the hamster wheel of ever-increasing lease payments.  If I told you that car means you have to work two extra years, how badly would you “NEED” it?   Just two examples, there are plenty of people who own their cars and will never be able to retire and others who lease who never have to work another day in their life if they choose not to.

    I will say I’m on track for financial freedom at 50- and I don’t feel like I’m living in like a hermit. I travel, live in a nice home, and drive a decent car.  Could I drive a nicer car, or buy a bigger house. Yes, but would that really make me happier?  Maybe? But surely not happier than being financially free, and know I never have to work another day in my life if I don’t want to.

    No Kids No Excuses for LGBT Financial Freedom

    For those of us without kids have no excuse not to save and have a fabulous gay lifestyle.  Diapers are expensive I hear.   We can travel for less (fewer mouths to feed), and sleep more.  I’d be willing to bet that not having kids allows us to work a bit more, which can potentially mean more career advancement.  Lastly, since we are talking about retiring early, we don’t have to wait until the kids have moved out.  Here in greater LA LA Land tons of kids are living at home into their 30s….which just mathematically puts a dent in retiring early.

     

    What it Taxes for an LGBT Early Retirement
    What it Taxes for an LGBT Early Retirement

    Notes: These amounts provide an 80% probability of lasting to age 90 when invested 60% in stocks and 40% in bonds. Assumes withdrawals rise with inflation each year. Source: David Blanchett, Morningstar. These rates are used for hypothetical illustration only and may not be used to predict investment results. Income from investments may fluctuate and the value of the investment may fall against the interest of the investor.  Investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk. This analysis is provided for informational purposes only and should not be construed as a recommendation.  LGBT Early Retirement in many parts of the country will be tough on the incomes listed here.

    Avoid Unsustainable Lifestyle Inflation

    How often do you hear a friend who got a raise, then ran out to buy a new car, or move to a nicer apartment?  Nobody? OK Maybe this is Gay LA thing.  Problem is, you get a raise for $500 bucks per month.  After taxes, you don’t actually get $500 (I hope I’m stating the obvious here).  You go buy a new car for $400 more per month and all of a sudden you have less disposable income.   This is not the way to stash away extra bucks to stay on track for financial independence.

    I’ve owned my home in Los Angeles for over 10 years.  As a percentage of my budget, it has gotten progressively cheaper over time as my income has increased.  (I’ve also been able to refinance and drop my interest rate from the 6’s to the 3’s) I have a four-year-old Lexus which I hope to drive quite some time, by the way, it’s paid off. This alone means I can put around another $700 per month more towards my LGBT early retirement financial goals. Don’t feel too bad for me it is still a Lexus.

    Could I move to a more expensive house and feel stressed financially? You bet.  Can I afford to go lease some sports car or Range Rover? Absolutely – but why?  Keeping my base expenses in check allows me to travel more, and still put away for a potential queer early retirement.   I don’t see myself retiring at 50, but I want to achieve financial independence by then. There is no reason you can’t do the same.  Smart financial decisions make other smart financial decisions easier and less painful.

    BTW not having a car payment alone translates into a pretty nice international trip per year for my husband and myself.  Cutting back in one area makes it easier to splurge in a more enjoyable area. Just saying.

    Avoid McMansioning your Housing Costs:

    A starter single family home in much of Los Angeles is running you a Million Dollars or More.  Moving is expensive, you often end up paying more property taxes.  (especially true in California with Prop 13).

    The American Dream is to own a home, not to move up houses every 3 years.  Enjoy what you have, there will always be a bigger nice or better house somewhere in your neighborhood.  This will happen no matter how much you spend on your house, or how often you remodel.  If you are spending 40-50% of your income on housing how are you ever going to save for a late retirement let alone retiring early?  Not to kick you while you are down, the bigger your housing expenses the more you will need to save for retirement.  Ideally, you would spend less than 30% of your income on housing.

    Some of my friends are even considering retiring like the Golden Girls.   Studies have shown happiness can add years to your life expectancy.  Not to mention shared housing can sure help stretch your retirement dollars. The more you can stretch your money, the earlier you can choose to retire. Sure beats living alone in Shady Pines.

    Keep More of what you Make- Look for ways to save on Taxes

    You may have heard the saying ‘It’s not what you make but what you keep.”  Look for ways to minimize your tax bill.  Commit maxing out your tax favored retirement accounts. A married couple could potentially put away $37,000 each year into their 401(k) plans ($49,000 if they are both over 50).    Self-employed folks have even more opportunity to save more with Solo 401(K) Plans and Defined benefit plans. If you are self-employed you can potentially put away $110,000 as a couple.  $122,000 if you are over fifty.

    Final Steps to Financial Freedom:

    If you are still decades away from a queer early retirement do what you can to save a little bit extra.  However, if you can see the light at the end of the tunnel and early retirement is in sight it is time to get serious.   Here are a few elements that you will want to solidify to make sure you stay on track and reach financial independence on your terms and time frame.

    How much does your Dream LGBT Early Retirement Cost?

    If you are within 5-10 years or retirement (early or not) think long and hard about how you want to fill your days, and how much that will cost.  The cost of launching a second career may be much less expensive than jet setting around the globe until you get tired of traveling so much. Once you’ve stayed at every Four Seasons Resort on the planet what else is there to do travel wise?

    I know many of you love HGTV and House Hunters International- a dream home in Paris may cost way more than a home in South America.  Then again it may not.  Budget Travel, First Class, RV, Gay Cruise all have varying costs.  Heck, I know quite a few people whose biggest expense is eating out EVERY and I mean EVERY meal.  I like eating out, but sometimes, I just don’t want to get off the couch.

    Back to reality, are you staying in the same metropolitan area?  Or will you be seeking out a locale with a lower cost of living?  Hobbies, education, friends, family fun.  Tons of ways to fill your days- some cost more than others.  Don’t be fooled that you will spend less money when you aren’t working.  You now have seven days a week to entertain yourself.  The younger you are the more you are likely to spend, and the longer inflation has to erode your purchasing power.

    Think about your Medical Coverage and Insurance in LGBT Early Retirement

    If you are retiring before 65 you will most likely need to think about medical coverage between the time you leave your job and become eligible for Medicare. With the affordable care act still on the books, you will have the ability to get Health Insurance.  If this is repealed retiring early may be more problematic for those which pre-existing health conditions.  Either way, this can be a substantial expense and must be planned for.

    If you are looking to retire abroad to travel extensively look into what type of health care is available where you will be spending time.  Also whether you will be able to use your US Health insurance while out of the county.  Even if you are able to use it, you may have to pay out of pocket and then get reimbursed.  Shouldn’t necessarily change your decision to retire early, but may mean some adjustments.  The level of advanced medical care will vary by country, and even be part of each county.

    Puerta Vallarta Beach Club is part of a Dream LGBT Early Retirement
    Puerta Vallarta Beach Club is part of a Dream LGBT Early Retirement

    Revisit your retirement investment choices:

    If you go online for generic retirement estimators or investment portfolios based on your age or time till retirement you may end up with investment choices that aren’t really aligned with your financial goals.  I would be confident saying a 49-year-old and a 64-year-old who are both one year from retirement would have different portfolios.  Likewise, I would expect different investment allocation for two 49 years old if one plan on retiring at 50 and other at 70.  Same age, different time frames, and investment needs.

    The very general rules of thumb you may come across on the internet are OK for rough estimates. But they may steer you wrong in general and are more likely to give you the wrong information if you don’t fit the stereotypical examples that were created to fit the rule of thumb.

    Remember your Life Savings have to last for your entire life:

    Many people will need to develop a plan for how to make their money last.  This may include treating your life savings like a paycheck rather than a piggy bank.  I can’t walk into my boss and say I want to take a vacation can I have $5000 extra this month. You really can’t do it in retirement when you are the boss either.  Set up automatic monthly withdrawals, and build your budget around that.  Resist the urge to raid your nest egg. Every time you pull money out you increase the risk of the money not lasting as long as expected.

    I often hear people joke that they want to bounce their last check.  Fun to joke about, but it sounds pretty terrifying if you bounce your last check, and the well is still alive.  Good to be alive, is the silver lining. Broke all the same.

    Retiring younger or pursuing a passion, the extra money can help fund all your fun stuff.  I often tell people to use make sure they have money for their essentials and work a bit for the splurges.

    You’ve made it now Sustain Your Golden Years of a Fabulous LGBT Early Retirement:

    Once you’ve made it to financial independence make sure you stay on track and maintain your status.  You didn’t work all those years to get just blow it once you stopped working.  No one wants to have to go back to work after they have found their bliss and escaped the grind of 9-5 working.

    Be Flexible Financially for a dream LGBT Early Retirement

    Financial Planning doesn’t end when you retire.  One could argue it become even more important after you have left the workforce.  At least annually review your finances. Check in on spending, review how long your portfolio is expected to last, how are you enjoying your retirement choices?  Are you spending more or less than expected?   Are you traveling more or less than expected?  What do you want to adjust or change in the coming year?  Find someone to help hold you accountable for your financial goals.  There will always be temptations to overspend.  Hear me now – no cocktail will taste as good as Financial Freedom Feels.  Either way, would you rather drink a fancy cocktail on the beach in Fiji or some gay bar listening to Karaoke. The choice is yours.

    Congrats you’ve made it to the end of the  LGBT Guide to Early Retirement.  If you still want to retire before you are 100 years old take action now.  The sooner you get started the easier it will be to make work an option.  Reach out to a fiduciary Certified Financial Planner like David Rae to make sure you are on track.

     

    Live for Today, Plan for a Richer Tomorrow.  Gay Money Matters!
    David Rae and Craig Herrera on CBS News discussing LGBT Early Retirement
    David Rae and Craig Herrera on CBS News

    DAVID RAE, CFP®, AIF® is a West Hollywood fiduciary financial planner with DRM Wealth Management and independent RIA, a regular contributor to Forbes.comAdvocate Magazine, Huffington Post Queer Voices, Investopedia not to mention numerous TV appearances.  He helps smart people across the USA get on track for their financial goals.  For more information visit his website at www.davidraefp.com

    Gays Do it Better – How to Have a Fabulous Financial Planner

    The opinions voiced are for general information only. They are not intended to provide specific advice or recommendations for any individual.  To determine which investments may be appropriate for you, consult with your financial professional.  Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk. This material contains forward-looking statements include but not limited to, predictions or indications of future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against a loss in periods of declining value. LGBT Early Retirement.  Gay early retirement is possible and will be fabulous.

    Connect With David Rae, Financial Planner LA

    David Rae, CFP® AIF®

    President / Founder DRM Wealth Management LLC

    1(323) 905-4380

    david.rae@financialplannerla.com

    "How the LGBT Community Can Retire Early"

    © Copyright 2019

     

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