Protect Your Financial Future

In 1995, the number of LGBT Americans whose relationship was recognized as either a domestic partnership or civil union was a bleak 1% per 1,000 same-sex households.¹   Thirteen years later, that number has climbed to 31%, a considerable increase, but still a long way to go.  Until state and federal laws, including the Defense of Marriage Act, change to protect LGBT couples both in the workplace and in the tax system, you may need to take extra caution when planning your financial future.  So, who is most at risk and what can you do now to insure peace of mind for your golden years?  

The inequalities facing LGBT couples are substantial when it comes to their ability to accumulate wealth, plan for their future, and pass on wealth.  These inequalities are particularly significant for lesbian couples. For instance, only 50% of lesbian couples have at least one member eligible for an employer-sponsored retirement plan compared to 79% of male couples. The gender gap in wage and retirement savings means that lesbian couples are severely disadvantaged when compared to their male counterparts. As a result, elderly lesbian couples rely more on public benefit programs or continue to work beyond retirement age to maintain their household incomes. ²

Opponents of the Employment Non-Discrimination Act claim that the costs of adding a partner as a contributor or beneficiary of a plan are exorbitantly high, when in actuality they are quite minimal.  For employers, it is a matter of amending the plan and associated documents and having a longer payout schedule – minor administrative costs.

Contacting a qualified financial planner should be the first step towards protection.  Your advisor can review ideas such as establishing tax-deferred accounts, such as 401(k)s and IRAs – where a beneficiary can designated for each account. With research indicating that a higher percentage of LGBT people are living alone and without adult children, an insurance specialist may recommend considering policies for long-term care and additional disability insurance for assisted living, nursing home stay or at-home care.  These are just a few areas to consider –children’s educational needs, charitable giving and estate planning. 

With only 30% of all same-sex households having any access to relationship recognition, gay & lesbian couples should not presume that the support system put in place for retirement and disability is equal for all.  Empower yourself, your family and loved ones though financial education and planning.  Including a non profit such as GLAAD in your estate planning will help you defer taxes and will provide a legacy for your family in the advancement of full equality.  For more information on how to give through planned gifts, please contact Jonathan Sandville, GLAAD’s Chief Development Officer at 323.634.2051 or sandville@glaad.org.

¹ National Gay and Lesbian Task Force  
² Naomi G. Goldberg, The Williams Institute, October 2009