What we can learn from queer travelers
The Millennial generation is teaching us a thing or two about life. We GenXers and Boomers sacrificed fun and money for our McMansions, five- and six-figure cars and driving the stock market to new highs. Millennial queer travelers, on the other hand, have adopted the ‘You Only Live Once’ ethos, enjoying a fuller life today . . . but at what cost?
What queer travelers should know
Roughly 20% of Millennials claim to be members of the queer community. Grindr revealed in a recent LGBTQ Millennial Travel study that 40% of queer millennials travel quarterly and nearly 25% travel monthly. The bright spot is that over 50% of queer travelers start saving their travel money between three and six months in advance.
What’s surprising is that an estimated $100 billion of queer traveler’s dollars are spent in the United States, and Millennial queer travelers spend a fair chunk of that $100 billion. Millennial queer travelers are like the average Millennial who spent $4,594 per person on travel over the twelve months ending November 2017, an 8% increase over 2016.
The risk of queer travelers’ YOLO lifestyle
Catching the travel bug isn’t uncommon, but travel isn’t cheap even with the myriad of ways for the general population and LGBTQ-travelers to manage travel costs. Regardless of cost, a majority of queer travelers expect to travel. This begs the question, are queer Millennials making a mistake with their YOLO mentality?
In a recent Aperion study, 34% of Millennials surveyed said they could retire comfortably on $200,000 or less. Fifty-five percent felt a comfortable retirement could be had on $500,000 or less, and a full 75% felt they would need $1,000,000 or less.
With the average American household spending $57,311 in 2016 according to the Bureau of Labor Statistics, a retirement nest egg of $200,000 would last them just over 41 months, or less than three and a half years. A $500,000 retirement nest egg would last about eight and a half years. A $1,000,000 retirement account would last a little longer than 17 years. None of these factor in inflation.
A future queer travel
What expectations should queer travelers consider when they’re enjoying their YOLO lifestyle?
At the current inflation rate of 2.5%, the $57,311 spending from above will turn into $153,883 in 40 years when many LGBTQ Millennials reach peak retirement age. Social Security income, which is a large portion of income for those with little retirement savings, is indexed to the Consumer Price Index (CPI). CPI has increased at a rate lower than the general rate of inflation for years (2.45% from 1993 to 2010), whereas health care costs, a large draw on retirement savings, increased 6.4% annually between 1993 and 2010.
Thus, Social Security income has shown to not keep up with the rate of expenses for many retirees, and Millennials shouldn’t rely too heavily on Social Security.
Queer travelers should know this Magic Money Number for retirement
We believe that everyone, LGBTQ Millennials included, can live fabulous not fabulously broke. Everyone, LGBTQ Millennials included, can have the lives they want, including traveling, by using the right tools and having the right expectations.
This Magic Money Number Calculator will help queer Millennials, GenXers and Boomers forecast how much money they need to save for retirement to have a good quality of life. It gives a clear picture of how much money workers need to save and invest to have the retirement they want. Knowing this number makes it possible to balance the life Millennials, and all of us, want today with the life we want tomorrow.
Knowing their target retirement number should inspire queer Millennials to pay as much attention to their retirement as they do travel, and the sooner they start saving more for retirement the better due to the value of compounding interest. The longer and more consistently queer Millennials invest in the market, the more likely they’ll reach higher, more realistic retirement savings goals.
The S&P 500 index has given a 9.8% average annual return for more than the last 90 years. Therefore, the 25-year-old Millennial with zero money saved today can reach a million dollars in retirement savings in 40 years (age 65) by investing $225 a month at 9% every month for the next 40 years. The 35-year-old Millennial with zero money saved today will need to invest $560 a month at 9% over 30 years to age 65 to save $1,000,000.
LGBTQ Millennials don’t have to completely sacrifice today for tomorrow, though. With realistic expectations and proper planning, they can have the life they want today and the life they’ll want in retirement. It may just mean delaying some travel today, cutting back a little now, so they can live YOLO into their twenties, thirties and beyond.
More resources for queer travelers: