Many Americans struggle to save for retirement, but those who identify as LGBTQ+ may have a harder path than their non-LGBTQ+ peers.
More than half of middle-income LGBTQ+ folks were not confident they will have enough money to live comfortably in retirement, compared to 29% of non-LGBTQ+ folks in the same income bracket, according to the Employee Benefit Research Institute's retirement confidence survey released in June. The survey of more than 2,600 adults took place from Jan. 4 through Jan. 26.
The report also found a significant gap between earnings of LGBTQ+ Americans and their non-LGBTQ+ peers — in each income group, non-LGBTQ+ Americans were more likely than LGBTQ+ ones to have $250,000 or more in savings.
"We are just not on an even playing field in terms of preparing for our retirement," said Rob Curtis, founder of Daylight, a financial platform dedicated to furthering the financial well-being of the LGBTQ+ community.
There are a few barriers working together to complicate retirement savings for LGBTQ+ folks.
One issue that the EBRI survey found was that LGBTQ+ respondents were less likely to be married, which means they couldn't access spousal benefits or build for retirement as a legally bound couple.
"That changes the whole dynamic of being able to have that crossover protection," said Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute.
"They're not necessarily taking advantage of the tools that are available," said Curtis.
On average, LGBTQ+ folks tend to make less than their straight counterparts and are more likely to be cut off from familial wealth. This earnings gap is even larger for those whose identities intersect with other marginalized groups — people of color, women and transgender individuals generally make less than their white, cisgender male counterparts.
"One big issue is developing a broader array of financial advisors that can help that community," said Copeland.
There is also a lack of role models retiring in the LGBTQ+ community in part because of the AIDS epidemic in the 1980s. In the early 1990s, AIDS was the leading cause of death for all Americans ages 25 to 44, according to the Centers for Disease Control and Prevention.
"There is a cohort of people who are socialized to believe you may not last very long, so spend all of your money now and live in the moment," he said. "There's a real reckoning coming for folks that were conditioned to believe that."
If you are playing catchup on retirement planning, it's important to start saving as much as you can as soon as possible, according to Tamara Telesko, director of wealth planning strategies at TIAA.
Generally, the easiest way to do that is through an employer-sponsored retirement plan, such as a 401(k) or 403(b). You can save up to $20,500 in 2022 in such a plan — $27,000 if you're over 50 — and many employers offer a match on funds, which is essentially free money.
"I always advise people to pay yourself first," Telesko said, adding that means that your budget should include savings for your future retirement and other goals such as home ownership or having a family.
There are also important estate-planning documents that all people should think about but have extra importance for the LGBTQ+ community, especially for those who aren't married.
This includes making sure you have the correct beneficiaries listed on all accounts, such as life insurance and retirement savings, said Telesko. People should also have a living will, health-care proxy and HIPAA authorization form, which gives others the right to manage your health and finances if you're incapacitated.
To be sure, there's hope that as today's millennials and Generation Z adults approach retirement, these things will change as more than ever identify as queer and are pushing for safe, equitable spaces.
Gen Z LGBTQ+ folks are looking for affirming ways to manage their finances and find resources to save for retirement, learn to budget, manage debt and set themselves up for a potential recession, according to a survey from Daylight.
"Money is freedom for this community," said Curtis.
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