The Snowball Wealth Financial Roadmap
I still remember the 2015 landmark Supreme Court case that provided marriage equality in the United States. I remember thinking to myself how wonderful it was that same-sex couples would finally be able to enjoy the legal benefits of marriage that had previously been denied to them. As a financial advisor, I know all too well the financial benefits that marriage can provide.
Despite this win, there are still some unique financial challenges that many in the LGBT+ community face. According to an Experian survey, 62% of LGBTQ respondents reported having experienced financial challenges due to their sexual orientation or gender identity. Despite making gay marriage legal in 2015, it wasn’t until 2020 that the Supreme court ruled that companies could not fire someone for being gay or transgender.
A few considerations while financially planning for the LGBT+ community are:
Although some studies have indicated that gay men and lesbian women out earn their heterosexual counterparts, there are also contradictory studies. Measuring income equality in the LGBT+ community can be difficult for a number of reasons. However, in the case of transgender people, most studies point to lower earnings. Lower earnings are often tied to workplace discrimination.
Workplace discrimination can also impact promotions and job satisfaction. 12% of members surveyed by Experian reported being passed over for a job in connection with their status as a member of the LGBT+ community.
Pro-tip: Know your worth and negotiate your salary. Join affinity organizations within your company, if they are available, and network with others who are in a position to ensure that you are paid well. If you believe that you are being discriminated against, don’t be quiet. You can file a report with the Equal Opportunity Employment Commission.
Marriage equality for all has been beneficial to the LGBT+ community. Marriage allows people to combine their incomes and receive benefits such as social security, healthcare and pensions from their spouse. One consideration that couples should consider is differences in life expectancies between men and women. This could impact your retirement planning if one or both of you has a longer life expectancy. Typically, women have a higher life expectancy than men. For this reason, many traditional retirement planning discussions advise women to plan for a longer retirement. For couples that have two women, it is important to take these needs into consideration.
Pro-tip: When starting your retirement plan, make sure you consider factors that many traditional advisors would not consider such as longer life expectancies for women. You should create a plan and start early.
In addition to potential discrimination in assisted living facilities, women generally become the primary caregivers for aging parents. This means if there are two women in a relationship, there may a need for more enhanced planning for time off to care for loved ones and to provide emotional and financial support for aging parents.
Pro-tip: Plan ahead for future expenses and consider if you will need to take time away from your career. Download the budget planner from Snowball to get a handle on expenses now.
Financial inclusion in the LGBT+ community can still be a challenge for many. Join the community at Snowball Wealth to learn more about paying off debt and building wealth.
Sources: Business Insider and Experian