Vladimir Vladimirov / E+ / Royalty-free
The State of the LGBTQ+ Community
On a summer night in 1969, patrons were enjoying themselves at the Stonewall Inn, a bar located in New York’s Greenwich Village. The only difference to other bars around the area was the fact that the Stonewall Inn was largely frequented by gay customers. At the time, homosexuality was a crime in every state except Illinois. Much like many nights before, the police raided the bar sparking a clash with gay youths. Over the next couple of days, protestors took to the streets in what would become known as the “Stonewall Riots.” While the protest didn’t get much media attention, it is today largely credited with launching the modern LGBTQ+ movement in America.
Since 1969, much has changed. From the legalization of gay marriage in all 50 states in 2015, to the acronym LGBT, growing to LGBTQ+ to include and support other marginalized groups. Yet, especially in the workplace and financially, some LGBTQ+ Americans still face inequality. In 2020, the Supreme Court of the United States affirmed that “an employer who fires an individual merely for being gay or transgender defies the law,” building on the Civil Rights Act of 1964, and for the first time protecting LGBTQ+ Americans at the federal level from being ousted from their workplace because of their sexual orientation.Also in a 2020 study, 36% of surveyed LGBTQ+ Americans responded that they face incidents of discrimination in the work place. In turn, almost 30% of respondents said that discrimination affects their financial well-being, with 31% responding they have faced negative impacts on their “salary or ability to be promoted or their ability to retain employment."
LGBTQ+ Retirement Equality and Challenges
One of the landmark decisions for LGBTQ+ rights in America was Obergefell v. Hodges, in which the Supreme Court ruled that the 14th amendment requires all states to grant same-sex marriages and also recognize marriages from other states.This opened the door to a more equal society and provided advantages that were previously unavailable to same-sex couples and became accessible after the Supreme Court decision, including:
- Claim Social Security benefits based on their spouse’s work history.
- Leave unlimited assets to each other without triggering federal estate taxes.
- Provide coverage for each other through their health insurance plan.
While potentially eliminating concerns over not being able to access the above benefits, financial and economic worries remain – especially regarding retirement. A 2020 AARP study showed that “65% of the LGBTQ+ participants age 45 or over were extremely or very concerned, and 88% were at least somewhat concerned,” about not having enough money to retire.In turn, ongoing discrimination and negative impacts on salary have led to income gaps and unforeseen financial inequalities.
The Retirement Savings Gap and How to Address It
A gap in retirement savings can lead to financial insecurity later on in life. A recent study found that “two-thirds of LGBTQ+ Americans carry a high amount of financial stress, with 28% saying their financial stress on an average day is ’very high’ and 38% reporting ‘somewhat high’ financial stress.” The same study also shows that LGBTQ+ Americans are less likely to have a retirement account compared to the overall population. That in turn translates to LGBTQ+ Americans being "less likely to be confident in having enough to live comfortably throughout retirement and more likely to agree that retirement savings is not a priority relative to current needs than non-LGBTQ Americans."
Solving a retirement savings gap created by decades of systematic inequality is not easy. It involves expanding awareness when it comes to financial services for LGBTQ+ Americans. Consider some of these suggestions that can be especially helpful when talking with LGBTQ+ Americans.
- Appreciate their difference – Acknowledge how financial planning is different for LGBTQ+ individuals and explain how their planning can differ from heterosexual couples.
- Stay Informed – Learn more about gender pronouns and how to properly use them (See the guide provided below). Keep informed on news and information that relate to legislation and financial industry news that could affect LGBTQ+ Americans.
- Don’t assume – Everyone’s experiences are different. Even if you know people are LGBTQ+, they have unique perspectives on the issues that they face, including financial planning. Engage in a conversation and learn about the person, not just their sexual identity.
Financial Advice and Education
A recent survey by the Insured Retirement Institute (IRI) and American Equity, found that 70% of respondents believe financial advisors to be trustworthy. The study also found that over half want an advisor to explain and handle the selection and management of retirement products.The study does not differentiate gender identity or sexual orientation. However, new data shows that nearly half of LGBTQ+ Americans have experienced discrimination by someone in the financial industry, including banking and investing.
LGBTQ+ rights have changed drastically over the last century. While creating more equality for LGBTQ+ Americans has been a focus, there are still many areas of life where those equalities are either hampered or not present at all. One of the most important things you can do to support LGBTQ+ Americans, not just in their financial planning journey but their lives as a whole, is through education about the issues and struggles they face. Here are resources on inclusivity tips and LGBTQ+ topics.
This content is for informational purposes only, and is not a recommendation to buy, sell, hold or rollover any asset. It does not take into account the specific financial circumstances, investment objectives, risk tolerance, or need of any specific person. In providing this information American Equity Investment Life Insurance Company is not acting as your fiduciary as defined by the Department of Labor. American Equity does not offer legal, investment or tax advice or make recommendations regarding insurance or investment products. Please consult a qualified professional.
Annuities are long term vehicles designed for retirement income and are not suitable for everyone. They involve restrictions and charges, including possible surrender penalties for early withdrawals. Annuity distributions are subject to ordinary income taxes, and if taken before age 59-1/2 may incur an additional 10% federal penalty. Guarantees are based on the financial strength and claims paying ability of American Equity and are not guaranteed by any bank or insured by the FDIC. Availability may vary by state. Possible interest credits for money allocated to an index-linked crediting strategy are based upon performance of the specific index; however, fixed index annuities are not an investment, but an insurance product, and do not directly invest in the stock market or the index itself.
Links are provided for informational purposes only. As they represent third-party content, we don't guarantee their accuracy or accept liability for the content. If you are interested in accessing any of the source material mentioned in this article, please contact us at: email@example.com