07/25/2013 08:15 pm ET Updated Feb 02, 2016

LGBT Retirement Money

We know we'll need a retirement nest egg now that were married, or at least thinking about it. Being financially joined at the hip leads to thoughts on funding our dreams, even after our hairline starts to disappear. One person in each couple usually takes the lead in planning, but cooperation increases the payoff: a good night's sleep knowing that we are planning for the long haul. These five funding sources work for singles too.

City dwellers typically spend about half their income on housing and transportation. When we became an "item" in 1975, we each let go of our existing apartments and pooled our money for an upgrade. Like many other couples, we merged our furniture and kitchenware, partially shredded towels and "picture collections" and saved rent money at the same time. With disparate incomes we split the costs by the ratio of incoming dollars. What did we do with the money we saved? The truth is that retirement wasn't on our radar yet, so we spent it. Dan upgraded to a 4-year-old Volvo soon after.

The next year brought a salary raise, and Dan put much of it into retirement savings. Once that used car was paid off, those savings also went into the plan. The combined housing and transportation expenses were reduced as our incomes went up. We stayed in that apartment for a year and a half, then moved to a condo for the next five, then to a home for 27 years. We learned that a 30-year mortgage can be paid off sooner by adding a few hundred dollars more than the scheduled payment each month, saving thousands of dollars in interest. Over a quarter of a century, the value of that home went up enough to contribute about a third of our final nest egg.

Our second large resource was auto savings. Whether new or used, we kept each auto an average of eight years or more. This reduced payments, insurance and registration costs. According to Jonathan Pond, this habit will save over $300,000 per driver when they forego the privilege of having a better car than the neighbors.

Third: Social Security is the best annuity on the market. Get in your 40 quarters (10 years) and you'll get more than your money back, even indexed for inflation. No financial advisor's tax-sheltered annuity can compete with Social Security for low administrative costs and high returns. Your principal is more than guaranteed. There will be spousal benefits too.

Fourth: Salary deductions are so easy. What's the hardest part? Starting. It is the rare young person who has the sense to comprehend what we all know: Earlier contributions that compound over 30-plus years make the most sense. But now is the best time to start, regardless of the number of years to your retirement.

Finally, reduced retirement plan costs will add a third or more to the overall value of a retirement plan. By the time an investor pays an assets under management (AUM) percentage, on top of insurance costs and fund expenses, they have allowed a major portion of market gains to be siphoned off by Wall Street's big banks and brokerage houses -- even those who are so friendly in person and whose financial firms support LGBT causes. Many people think that a potential financial adviser is trustworthy when he or she is LGBT or their firm is LGBT-friendly, but nothing is further from the truth. Without knowledge of costs and fiduciary responsibility, trust may be used against your best interests. Ask what costs are ongoing after your plan is in effect. Better yet, do a little research and you can easily invest in the world's entrepreneurial expertise with a balance of bonds and stocks on your own. It's not rocket science.

You might opt to review your overall plan with a professional, but please take caution: Most advisors and dealer/brokers are linked to Wall Street or so-called cut-rate brokerages. They will want to charge an ongoing fee every year, based on your total assets and hidden fees. AUM costs will bleed your assets off the top, in good years and in bad, hurting you in the long run, in our opinion. Forego their offer and go instead to a fee-only fiduciary advisor paid by the hour.

Summary: Five ways to find the money to help fund those later years: controlling housing and transportation costs, social security, company retirement plans, and self-directed savings. A fiduciary advisor, fee-only (paid by the hour), can be an excellent source for help. Best of fortunes!

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