LGBT seniors face special challenges in retirement
It鈥檚 common to worry whether you will have enough for retirement and be financially secure as you get older. But Services & Advocacy for Gay, Lesbian, Bisexual & Transgender Elders released聽聽in October 2014 finding that the LGBT community is far more concerned about these issues.
SAGE, a non-profit group focusing on improving the lives of older LGBT people, found that 51% of LGBT elders are worried they won鈥檛 have enough money as they age, compared to 36% of the general population. Additionally, over 40% of older LGBT people fear they鈥檒l outlive retirement savings and are very concerned they鈥檒l have to work beyond retirement age, with only a quarter of non-LGBT people sharing the same level of concern.
LGBT seniors and financial security
This elevated level of financial insecurity in the LGBT community, in addition to higher poverty rates among aging LGBT elders, can be attributed to several factors, according to Robert Espinoza, senior director of public policy and communications at SAGE.
Espinoza explains that today鈥檚 LGBT elders lived through decades of overt institutional discrimination, leading many of them not to trust financial institutions. SAGE research has found they鈥檙e more likely to do retirement planning on their own. Additionally, workplace and employment discrimination has resulted in less career advancement for many, leaving them with less in聽retirement savings.
In addition, marriage equality laws are currently a patchwork, Espinoza says, leaving significant confusion about federal benefits.
鈥淓ven though same sex marriage is slowly moving across the U.S., the rights in states that do not recognize same sex marriage are a concern for retirement,鈥� says Kimberly J. Howard, a certified financial planner and owner of KJH Financial Services in Newton, Massachusetts, and Denver, who helps LGBT individuals and families. 鈥淔or example, Social Security, state pension, company pensions and military benefits do not always recognize same-sex partners for spousal benefits. The lack of spousal benefits could determine whether the retirement phase is a comfortable or a stressful time.鈥�
Enita Torres, a 56-year-old Houston resident, says she鈥檚 anxious about whether she and her partner of nearly 30 years will be able to receive each others鈥� Social Security benefits.
鈥淭he way the laws are now, if I pass away, I鈥檓 not clear if my partner could get my Social Security benefits,鈥� Torres says. 鈥淭he federal changes aren鈥檛 clear, so I鈥檓 just not sure.鈥� She says she and her partner also worry about not getting property-tax exemptions and retirement health care benefits that her parents enjoyed.
Espinoza also says ageism can be a problem.
鈥淚n the LGBT community, we find there鈥檚 an obsession with youth, and people don鈥檛 want to talk about aging,鈥� Espinoza says. 鈥淚f you鈥檙e not talking about aging, you鈥檙e probably not talking about the type of life you want to live in your older years.鈥�
LGBT-friendly financial, legal professionals
Determined not to be another statistic? An LGBT-friendly financial planner is your greatest ally. Howard says many LGBT people are reluctant to seek out advisors, but it鈥檚 important due to the unique financial issues facing the community. 鈥淭hese issues include spousal retirement benefits, state and company pensions, how to handle beneficiary concerns and long-term care policies,鈥� she says. 鈥淎lso, as hard as it is, the individual needs to be forthcoming about being LGBT, or advice may not be very helpful.鈥�
If you鈥檙e not sure where to go, some financial institutions now have planners dedicated to the LGBT community. A pioneer in this field, Wells Fargo created the Accredited Domestic Partnership Advisor program, which has over聽qualified to help same-sex spouses and domestic partners plan their finances.
Margie Archer, a vice president and advisor in Wells Fargo鈥檚 program, says it鈥檚 important to find an advisor you can be authentic with and start planning now. In addition to helping you answer common questions such as how much you need for retirement and when you can retire, Archer says LGBT-friendly advisors are invaluable for same-sex couples. They can help you with concerns such as whether your partner will get your Social Security or retirement benefits, how to ensure your partner inherits your assets, whether it is financially smart for you marry and whether you should make a financial plan together or separately.
There are other steps you can take now to feel more prepared for your future. Follow these expert tips for increased financial security:
Create an advance directive
An advance directive is an important part of financial planning, Espinoza says, because your end-of-life and medical decisions may affect your financial decisions. An advance directive contains both a living will, which explains your health care wishes, and a medical power of attorney, which allows you to designate a health care proxy. Your health care proxy is the person you choose to make your medical decisions if you become incapacitated physically or cognitively. This person also would manage the financial aspects of your health care, he explains. You can create these legal forms separately, but creating them together ensures they鈥檙e in sync.
Espinoza adds that although most older LGBT people are single and don鈥檛 have biological children, the law privileges your biological next of kin as your health care proxy.聽鈥淚f you want to protect and support your family of choice, make sure you have planned to do that and it doesn鈥檛 default to blood relatives,鈥� he says. Archer also recommends bringing these documents with you when you travel outside of your state or country in case anything happens to you, especially if you are married but traveling somewhere that doesn鈥檛 recognize it.
Consider long-term care insurance
Archer says aging same-sex couples, especially those without children, often worry whether they can live at an elder care facility together. She says having long-term care insurance is vital to ensuring you will be taken care of and have a choice in where you go.
Don鈥檛 forget estate planning
You should also consider what happens to your money after your death. Espinoza says disputes about how the deceased鈥檚 money and estate should be handled are common among family members. 鈥淚f you really want to make sure your friends and family understand and respect your wishes, you have those conversations as early as possible,鈥� he says. 鈥淭hey should not find out after you die how you want your money spent.鈥�
Hire an LGBT-friendly lawyer
An LGBT-friendly lawyer can create the documents mentioned above, and if you鈥檙e in a same-sex partnership, help you interpret the laws and determine which benefits you鈥檙e eligible for in your state. It鈥檚 important to understand what if any survivor benefits, tax benefits or Social Security you will receive so you can plan your finances accordingly.
Torres and her partner have been working with LGBT lawyers for 20 years to ensure they have wills and other documents needed to protect each other. 鈥淲e have to put a lot more in writing to try to keep our relationship and inheritance safe,鈥� Torres says. She still worries that their documents could be challenged if they get a judge who doesn鈥檛 recognize their relationship, but they feel as prepared as they can be with their documents in place and joint tenancy on their financial accounts.
Resources for the aging LGBT community
If you need help finding LGBT-friendly resources where you live, visit the聽聽on SAGE鈥檚 National Resource Center on LGBT Aging. They list services by state that can help with everything from finding an LGBT-friendly retirement facility to getting a free advance directive.聽聽also can help you determine your rights in each state.
