Retirement is not easy for most couples and even harder for lesbian, gay, bisexual and transgender (LGBTQ) people. A modest amount of planning can go a long way to providing the financial support you need.
Many LGBTQ seniors and those of working age:
- Have faced employment discrimination in their careers;
- Can’t rely on family members for assistance since far too many don’t have spouses and children to provide care; and
- Are not up to date on Social Security benefits[i].
All of us need to save more and manage our money better. But let’s explore a few of the retirement worries facing the LGBTQ community today.
Retirement Is Not Easy
Bias can be financially costly for members of the LGBTQ community. Discrimination in employment means less money to save, and it has only been a few years since same-sex couples have had the same access to Social Security. Married or not, LGBTQ baby boomers are less likely to be able to save for retirement as they face discrimination in hiring and wages. In fact, the Williams Institute found that the wage gap between gay and heterosexual men goes as high as 32%[i].
Further, there is genuine concern about LGBTQ boomers falling into poverty during retirement. Plenty of studies show that gay and lesbian couples have a lot less saved for retirement than their heterosexual counterparts. According to analysis of the Federal Reserve’s Survey of Consumer Finances by the AP-NORC Center for Public Affairs Research finds that same-sex couples have median retirement savings of $66,000, 25% less than opposite-sex couples, at $88,000[i].
Workplace discrimination, earning less doing the same jobs, and not saving enough are just a few reasons members of the LGBTQ community have less in retirement savings than their heterosexual peers. If you layer on the statistics of living alone without the typical family safety nets, retirement security is an immense worry.
The Worries of Living Alone in Retirement
According to an AARP survey of older LGBTQ adults, gay men are much more likely to live alone – again without the traditional family safety nets – compared to lesbians. Here is sobering stat from the AARP survey:
- 57% of gay men age 45-plus are far more likely to be single compared to 46% of lesbians[i].
With statistics like these, the retirement worry among LGBTQ people grows exponentially. LGBTQ adults may experience increased levels of social isolation due to potential barriers to social connectedness caused by stigmatization, ongoing discrimination, and a lack of legal recognition of partnerships (though this is changing)[i].
Social Security Benefits
On June 26, 2015, the U.S. Supreme Court issued a decision in Obergefell v. Hodges, asserting that same-sex couples have a constitutional right to marry in all states. But you might not know that this decision made it possible for same-sex couples and their families to benefit from Social Security programs.
As such, there are a few important things to do. First, the Social Security Administration encourages you to apply right away for benefits, even if you are not sure you are eligible. According to the SSA, applying now will protect you against the loss of any potential benefits[i].
Next, you must tell the Social Security Administration that you are married to determine entitlement to Social Security benefits, Medicare entitlement, and Supplemental Security Income. Directly from the Social Security Administration:
“Your marital status is important for our retirement, survivor, and disability programs because you or your spouse could be entitled to benefits or a higher benefit amount based on the relationship. Children or stepchildren could also be entitled to benefits. For some surviving spouses, divorced spouses, and adults disabled during childhood benefits could end if they marry.”
Finally, let the Social Security Administration know if you change your name. Otherwise, your earnings may not be adequately recorded, and you may not receive all your due benefits. The SSA will provide you with an updated Social Security card free of charge.
Talk to Your Financial Professional
Again, we all need to save more and manage our money better. If you are concerned about how being a member of the LGBTQ community may affect your retirement, talk to your financial professional. Your financial professional can help create a personalized financial plan tailored to your hopes and dreams – with far less worry than if you go at it alone.
Important Disclosures:
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by Financial Media Exchange LLC.
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Footnotes:
[i]EN-05-10024 - Understanding the Benefits - May 2021 (ssa.gov)
[i]Living Arrangement and Loneliness Among Lesbian, Gay, and Bisexual Older Adults - PMC (nih.gov)
[i]Maintaining Dignity: A Survey of LGBT Adults Age 45 and Older (aarp.org)
[i]10 rules to remember for LGBT retirement planning | BenefitsPRO
[i]Bias in the Workplace - Williams Institute (ucla.edu)
[i]LGBTQ Social Security Survivors Benefits Eligibility Expands | Money
