The LGBTQ community faces many distinct financial challenges throughout their lifetime that many are not properly informed of or prepared to handle. Despite the need for financial services, LGBTQ couples and individuals remain underserved in the wealth management industry, leaving many uninformed on how to properly manage their assets. 

In order to have a successful and stable future, LGBTQ couples and individuals must be educated and prepared on the financial challenges that may occur in their later years, such as retirement and estate planning. Building a long-term plan that accommodates their unique needs and goals can help them sustain a strong financial future. 

LGBTQ Community Members Have Unique Financial Challenges 

Planning for retirement can prove to be quite challenging for the LGBTQ community, even for those with a high net worth. Many retirement and nursing homes are not tailored toward LGBTQ people and may be outright discriminatory

LGBTQ retirement communities are only just emerging and may not exist in some areas. As a result, LGBTQ couples may be forced to live apart. Others may feel pressured to keep their sexuality secret, a regression for community members who lived openly before retirement.  

With fewer choices, they may be forced to pay more or find themselves unable to secure accommodations, thus making it important for LGBTQ people to prioritize retirement planning and secure a large nest egg. 

These situations are unacceptable to many in the community and may force them to lead more isolated lives. By growing a large nest egg, LGBTQ individuals and couples can avoid these potential retirement pitfalls. In addition, long-term care insurance can remedy these challenges by providing coverage for the care facility of choice. 

LGBTQ Challenges Go Beyond Maintaining Independence During Retirement 

The United States Supreme Court, as of October 2019, is deliberating a case that could result in sexual orientation discrimination in employment becoming illegal nationwide. The plaintiffs argue that the Civil Rights Act of 1964 protects LGBTQ professionals against discrimination because such exclusion violates the sex discrimination prohibition.  

In many areas, job discrimination based on sexual orientation remains legal. Without this vital protection, LGBTQ professionals are more vulnerable to discrimination that may lead to termination or an unhealthy work environment.  

When it comes to moving to a different town or state, LGBTQ people should have a plan prepared for their financial future in case their new location isn’t as accepting to their lifestyle. Preparation for challenges to come can help LGBTQ couples and individuals maintain their financial independence. 

Having substantial savings and investments allows LGBTQ couples and individuals to navigate difficult situations. It also provides them with the resources to move into a better situation when needed and to take discrimination matters to court. 

Hopefully, this case will succeed in bringing these protections to the community. However, unless the court rules in favor of the plaintiffs, the act will continue to offer no legal protection. 

LGBTQ Financial Planning Strategies 

Financial planning for LGBTQ individuals differs in some ways from planning for heterosexual people. For example, experts recommend saving between three to six months’ worth of living expenses and depositing additional funds in retirement and/or other investment accounts. Because of the ubiquitous employment and institutional discrimination LGBTQ people face in certain areas, they should consider saving six to twelve months’ worth of living expenses. 

Having an emergency fund is also important because it protects assets that are invested in a 401(k) or other tax-advantaged account. These accounts are great wealth builders, especially if they have an employer match. If these funds are left untouched for decades, the magic of compound earnings can turn them into a small fortune. 

When LGBTQ couples have no children, they often underestimate the importance of life insurance. However, these couples also need this protection. First, debt does not disappear when one spouse passes away. Credit card bills, mortgages and car loans can come down on the surviving spouse at a time when income declines. A life insurance policy can eliminate this worry. 

In addition, a policy provides an inheritance or charitable gift if these are priorities. An accelerated death benefit rider can be included to provide tax-free payments for critical illness-related medical bills. Considering health care bills often take 30 percent of retirees’ incomes, an accelerated death benefit rider frequently saves hard-earned retirement plans. 

Trusted financial planners can also help with big decisions, such as marriage versus domestic partnership. Marriage confers many advantages, including eligibility for coverage on a spouse’s employer health plan and the ability to transfer wealth between spouses tax-free. Though domestic partnership does not provide these advantages, it does avoid the marriage tax penalty. 

Marriage is becoming less and less common nowadays, and many LGBTQ couples decide marriage isn’t in their long-term plans. LGBTQ couples interested in having children through a surrogate or adoption should work with an advisor to create a comprehensive estate plan customized to their needs. 

Members of the LGBTQ community need sound and customized financial advice to navigate specific challenges and grow their wealth. Having a plan and being prepared for trials to come can help LGBTQ coupes and individuals sustain a healthy and happy financial future. 

Matthew Schechner is the President of Essential Advisory Services, a judgment-free financial planning firm located in Long Island, New York. Matthew’s goal in creating this firm is to empower families and individuals through guidance, education and a warm sense of community. To learn more about Essential Advisory Services, please visit