Finances in Retirement - Investments

Why Retirement Planning is Important for LGBT Americans

by Alli Thomas

Jun 15, 2021

Planning for retirement is a challenge for almost everyone. But same-sex couples and LGBT Americans face some unique challenges that make having a good retirement plan even more important:


Lower Retirement Savings

According to Prudential Financial, LGBT Americans are less likely than the general population to have a will or estate plan, less likely to have 401(k) accounts, and are putting less of their pay into retirement savings.


Higher Eldercare Costs

LGBT couples may face discrimination when it comes to securing assisted living or senior housing. As a result, they may encounter higher elder costs along with more rigorous application requirements.


Limits on Social Security Benefits

Because same-sex marriages were not recognized by the federal government until the Oberfegell v. Hodges Supreme Court decision in 2015, same-sex couples are not yet eligible to collect Social Security benefits from their spouse’s record in case of divorce. This is due to the requirement that the marriage last at least ten years.


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Estate Planning Complications

When it comes to estate planning, your same-sex partner (whether married or not) may only be entitled to one-half of your estate — or possibly even less — if you don’t have a formal estate plan or will.

Instead, the state will decide how your assets will be divided, with most of them typically going to your next of kin.

Unfortunately, 40% of LGBT individuals report that they have been shunned by family or close friends due to their sexual orientation. If you don’t have a great relationship with your family, it is even more important to have an estate plan that helps protect your assets.

Having a will is also critical if you and your partner or spouse have children together. A will allows you to name a guardian for your minor children. Without it, guardianship can’t be established and the state will decide who to appoint — and your partner or spouse may not be the court’s choice.


Get Help from a Financial Advisor

These extra challenges along with the usual complexities of retirement planning makes it even harder for LGBT Americans do plan for retirement on their own.

Not sure how to start? It’s easy. You can either browse our advisor directory to find one in your area or request a no-cost, no-obligation review of your financial plan using our Results In Advance Planning method to see how much you may be able to gain.

Request a no-cost, no-obligation advisor consultation today!

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Alli Thomas

Alli Thomas has worked in the financial services industry for nearly 20 years, with a focus on retirement-related investing. She began her career as a FINRA-licensed participant-services call-center associate at Vanguard, and then moved to Principal Financial Group, where she worked closely with employers, assisting with retirement plan set-up and design, selecting appropriate plan investment offerings, and maximizing employee participation through targeted education campaigns and enrollment meetings. Alli has also worked as a qualified 401(k) administrator and registered investment advisor for several small investment firms. She now writes about all things investment- and finance-related, leveraging her extensive experience and passion for retirement planning to help investors make well-informed financial decisions.

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