Is retirement planning any different for those who are LGBTQ+?

The LGBTQ+ community has made major strides toward gaining equal rights. But there are a number of serious challenges that remain, and they can emerge when those in the LGBTQ+ community are saving for retirement.

Let’s talk about some of those challenges – as well as ways to address them.

Marriage equality was a big win for LBGTQ+ retirement planning

To get a sense of the retirement landscape for LGBTQ+ Americans, let’s first talk about the advancements we have seen.

Before 2015, same-sex couples that were able to get married in states where it was legal experienced widespread exclusion from Social Security, pensions, health care and estate planning benefits. After the Supreme Court's Obergefell v. Hodges decision in 2015, same-sex couples across the nation were able to get married with recognition by the federal government, which allowed them to enjoy these basic benefits and legal rights.

• Social Security and pensions: Same-sex spouses became eligible for spousal and survivor benefits from the Social Security Administration and many pension plans.
• Tax and estate planning benefits: Married same-sex couples became eligible to file joint tax returns and access spousal exemptions and benefits from estate tax.
• Health care and insurance: Employer-sponsored benefits and Medicare benefits became more accessible to same-sex spouses as well

These financial benefits for same-sex spouses make it easier for them to accumulate and protect retirement savings.

More progress is needed and financial tactics to use

One can face difficulties when planning for retirement no matter who you are. But those who are LGBTQ+ still do not have fully equal rights and protections, and this can affect their retirement planning.

• A recent executive order seeks to undermine a 2020 Supreme Court ruling in Bostock v. Clayton County, which prohibits employment discrimination against LGBTQ+ people.
• The executive order also seeks to undermine housing protections on the federal level for those who are LGBTQ+. Certain states have passed laws granting LGBTQ+ housing protections in varying degrees, but some states have not adopted them at all.

If you want to move to a retirement community, make sure it’s in a state that has LGBTQ+ housing protections. Also, determine if the retirement community has a non-discrimination policy for LGBTQ+ residents.

Meanwhile, LGBTQ+ employment protections on the national level are relatively recent. For years, those who are LGBTQ+ were vulnerable to being fired simply for being who they are. The fear of being fired may lead some to prioritize emergency cash savings to cover current needs over investing in a long-term retirement account.

That may be one reason that 39% of LGBTQ+ Americans in an upper-income bracket said that retirement savings has not been a priority relative to current needs, based on a survey by employment benefits researcher EBRI. That was 14 percentage points higher than those in the same income bracket who are non-LGBTQ+.  

A Transamerica survey found that those who are LGBTQ+ have much lower retirement savings, on average, than those who are non-LGBTQ+.

If you’ve prioritized “saving for now” versus saving for retirement, there are ways to help you catch up on your retirement savings.

• Max out your annual contribution limits to your retirement account. If you contribute through your employer’s program, take advantage of the full employer contribution match if they offer one. The IRS contribution limit for 401(k), 403(b) and 457 plans is $23,500 in 2025.
• Take advantage of higher limits. If you’re over 50 in 2025, the annual contribution limit is higher at $31,000 and for those who are 60 to 63 it’s $34,750.

Other factors may lead those who are LGBTQ+ to prioritize saving for now versus retirement.

Countering the impact of historical discrimination

If you’re in your late 50s or early 60s and nearing retirement, you grew up in a time when society was a lot less accepting of those who are LGBTQ+. What if prejudices of the past have resulted in your being estranged from your parents, robbing you of that safety net?

If you’re single as well, you would have even less of a safety net if you lost your job or experienced some other hit to your income, and that may result in prioritizing emergency savings. About four times more LGBTQ+ people ages 50 to 64 have never been married versus their straight counterparts, according to a recent survey by UCLA’s Williams Institute. 

If you’re behind in saving for retirement, face the issue head on by meeting a financial advisor. We can make the process less daunting by working with you to create a retirement plan that suits your needs.

Your “chosen family” in retirement and estate planning

It shouldn’t be a surprise that more LGBTQ+ people are single than those who are not non-LGBTQ+. Same-sex couples were only granted the right to get married in the U.S. 10 years ago. In addition, statistically there is less of a chance of an LGBTQ+ person being a parent than someone who is non-LGBTQ+.

Some LGBTQ+ people may have created their “chosen family” out of close friends.

What does this mean if you have a health crisis during retirement and you need someone to make medical and/or financial decisions for you?

Work with an estate planning attorney to create a comprehensive estate plan, which includes having a health care proxy and power of attorney.

• A health care proxy authorizes someone you trust to make medical decisions for you if you can’t do so yourself.
• A power of attorney is a document that grants someone the power to make financial decisions for you if you’re unable to.

Also make sure you have a will or a trust and that you have the right beneficiaries for your insurance and retirement accounts, so your assets are distributed in the way you want after you pass.

Caretaking needs in retirement

If you have a “chosen family” that consists of your peers, it could be that they will be around the same age as you in retirement. It may be difficult for them to be your caretaker if you need one and they no longer have the energy they once did.

You become eligible for Medicare at age 65. Medicare Parts A and B cover several aspects of home health care that is part-time or intermittent. However, that may fall short if you need more robust and consistent care.

It’s important to plan ahead as much as you can. Long-term care insurance would help pay for a nursing home, though it’s important to plan ahead as rates can become expensive if you start the insurance coverage in your 60s.

Next steps

While there may be potential challenges that those in the LGBTQ+ community face with retirement planning, it’s also important to celebrate the progress toward equal rights and greater acceptance that has been made. Channel that positive energy into the ways you can set yourself up for retirement success. As you do, consider working with a financial advisor who can help you solve your retirement challenges and discover opportunities.