We understand. We respect and empathize. We are here to listen. We get it.
Our firm is committed to providing objective non-prejudicial and constructive financial planning that takes on a more holistic view of who you are as a person, your goals and your concerns about financial security. What follows is an example of the type of information our firm researches in an order to continue to learn more about the needs of the Community as well as insights into various planning needs. The information the firm reviews typically comes from a variety of sources, but there are three sources cited in this essay. The purpose for adding this information is to share how we stay up to date on the issues and overall needs that the Community has to deal with on a day to day basis. Our firm takes the issues the Community has to confront very seriously.
Obergefell v. Hodges – this is the 5-4 Supreme Court decision requiring all 50 states to recognize same-sex marriages. The Court ruled that the fundamental right to marry is guaranteed to same-sex couples by both the “Due Process Clause” and the “Equal Protection Clause” of the Fourteenth Amendment to the United States Constitution. Further, the Amendment requires that all 50 states, D.C. and the Territories of the U.S., to perform and recognize the marriages of same-sex couples on the same terms and conditions as the marriages of opposite-sex couples, with all the accompanying rights and responsibilities.1
The world for the LGBTQ+ community looks very different today than it did pre-2015. However, there are still some very distinct challenges that continue and do not affect straight counterparts.
More recently, on June 15th, 2020, the U.S. Supreme Court issued a landmark 6-3 decision affirming that the prohibition on sex discrimination in Title VII of the Civil Rights Act of 1964 extends to discrimination based on sexual orientation and gender identity. However, the Equality Act has yet to be passed by the Senate that will amend the Civil Rights Act. This has been in debate since 1972 and continues to this day.
Before the 2015 Supreme Court ruling, LGBTQ couples often had to jump through planning hoops to lock in estate planning benefits, such as assuring that assets were passed along to a surviving partner. But planning needs still exist — for both married and unmarried couples. According to 2019 data released by the U.S. Census Bureau, many same-sex couples sharing a household are unmarried. There is so much more that can be planned for in the community. Things like:
- Family planning, which can mean many different things.
- Income differentials and the challenges they create.
- Trans planning issues concerning financial security.
- Elder care in the Community
There are income gaps that continue to exist within the LGBTQ community. Some of the issues that can cause income gaps may be due to workplace discrimination. It has long been known that the transgender community suffers the most from job discrimination and income disparity.
There are many other factors that can impair financial health. Some of these factors are;
- A family refusing to pay for a child’s education and this means more student loans or less education.
- Having to make a move away from family to urban areas to feel safer.
- Dealing with the associated higher cost of living to do so.
These can all mean financial stability or independence are more delayed than in the more traditional straight community. This is due to certain financial supports that simply are not available. That all typically leads to a wealth and income gap that persists for much longer.
Another issue is workplace discrimination and how that plays a role in many aspects of financial planning for the LGBTQ community. It has long been known that Women and People of Color often earn less than their White counterparts. A lesbian couple of color is more likely to see pay disparity and that can drastically reduce their financial security and ability to save for a secure future.
There are many instances where LGBTQ folks haven’t demanded high-quality service and fair fees from their financial advisor, or may not even share the same values as their advisor. The associates at our firm are passionate about serving the LGBTQ community and understand the unique needs of LGBTQ clients.
Here are some Planning Tips:
- Married LGBTQ couples could now use Social Security claiming strategies that were previously off limits.
- There is easier treatment of qualified retirement accounts like IRAs, Pensions and 401(k)s, which are passed along to a spouse upon the death of the owner, without going through probate.
- A widowed spouse pays no estate tax when receiving money after a spouse’s This tax benefit also had not been available to LGBTQ couples prior to the amending of the 14th Amendment.
- Because same sex marriage is still relatively new, it raises some unique planning challenges for LGBTQ couples. Consider an example of a couple in their 50s who have been together for a long time but just recently married. This couple has had to focus on things like getting on the same page financially, commingling assets and dealing with their taxes — all issues that most heterosexual couples their age have long
- There are complexities around LGBTQ adoption, fertility and medical expenses that straight couples don’t
The same article referenced a study performed by Prudential. In it, the following results were determined;3
- Lesbian women earn less than heterosexual women, reporting an average annual salary of $45,606 vs. $51,461. (A difference of $5,855)
- Gay men reported earning an average of $56,936, with heterosexual men earning $83,469. (A difference of $26,533).
- LGBTQ respondents surveyed in 2016 are less likely to have started saving or investing for retirement, to have insurance products and a will or estate plan than those surveyed in 2012 or general population
- More LGBTQ respondents consider themselves “spenders,” – 48% compared to 32% of the general The respondents spending patterns confirmed that they spend more and save less, compared to the overall population.
- Overall, the LGBT population owned less financial planning products (such as mutual funds, life insurance or will) than the general
- 41% of respondents today, compared to 31% in 2012, said they are struggling
As can be seen from the information found, referenced and written above, there is still much work to be done and much bias to be overcome. So, you can rest assured in knowing that…
1 Obergefell v. Hodges, No. 14-556, slip op. at 22–23 (U.S. June 26, 2015) (“The Court now holds that same-sex couples may exercise the fundamental right to marry [T]he State laws challenged by Petitioners in these cases are now held invalid to the extent they exclude same-sex couples from civil marriage on the same terms and conditions as opposite-sex couples.”). https://www.forbes.com/sites/brianthompson1/2018/06/13/planning-for-lgbtq-couples-distinct-financial-challenges-persist/?sh=44efba 6233202 Thompson, Brian. “Planning for LGTBQ Couples Distinct Financial Challenges Persist”, Forbes.com. Last Modified June 13th, 2018,3 IBID
Interested in learning more about our firm?
There are reasons why each of us is the way that we are – why we earn the money that we do, why we spend our money in the way that we do, and why we save money in the manner that we do. At Coastal Retirement Advisors, our role is to uncover what makes you “you.”
Our clients are all types, but they regularly share a few qualities. They desire a helping hand to move forward with their finances, and they have complex financial needs which require an advisor with a compassionate view and disposition. We believe we bring a degree of empathy and authenticity to our role that is absolutely necessary when dealing with challenging circumstances.
Our areas of specialty include, but are not limited to, the following:
Families with Special Needs
Supporting a child or family member with special needs can be one of the richest experiences life has to offer, yet it can also be one of the most costly. Not only can annual costs be high, but it’s pivotal to ensure your loved ones will be financially supported in the event something happens to you. We can help you navigate your family’s complex situation by advising on everything from life insurance and estate planning, to taxes and government benefits.
Small business owners often desire to keep control over every aspect of their business, yet do not have the leftover time to keep a sharp eye on their personal finances. We help business owners convert their successful businesses into long-lasting wealth by making sure they have plans in place. Your plan may involve:
- Protecting your business and personal assets
- Preparing for unexpected circumstances (to you or a key employee)
- Choosing a retirement plan that works best for you and your employees
- Planning your transition out of the business
Seventy percent of the LGBTQ community has reported being behind when it comes to saving for retirement, versus 63 percent of the general population1. It’s no secret that LGBTQ individuals and couples face their own unique legal and financial decisions when planning for the future, due to decades of discrimination, lack of marriage rights, and other challenges like extra costs when starting a family. In addition to helping answer common questions such as how much you need for retirement and when to retire, we help same-sex couples with concerns such as Social Security, retirement benefits, health insurance options, and more.
1Forbes, August 1, 2019, https://www.forbes.com/sites/davidrae/2019/08/01/lgbtq-community-money/#1b9567262143