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Surprising Considerations for LGBTQ+ Investors & Allies


If you’re a member of the LGBTQ+ community, you already know that many parts of your life are affected by unique and sometimes challenging decisions and differences. What you may be surprised to learn is that while many of the things you have to think about concerning your financial future may fit into a fairly standard financial planning model, other factors way warrant more customized approaches. Retirement, child and education planning, and even insurance and estate matters can involve certain steps that you’ll want to be prepared for depending on your location and marital status.


Additionally, LGBTQ+ individuals, families, and allies may be looking for strategies to invest more intentionally where social responsibility and allyship are concerned. There are many ways to ensure that you’re using your money in ways that fit with your beliefs and goals at the same time!


Pride Month may have just ended, but we’re always pleased to walk through some considerations for investing in ways that feel tailored to your specific needs and wants, including socially conscious investing strategies to help you put your money where your morals are, so to speak.


In This Article:

LGBTQ+ Financial Planning Considerations

It’s not surprising that with the many other considerations and challenges LGBTQ+ people face, there are financial considerations as well. With dozens of big financial decisions in anyone’s future, it’s smart to plan ahead! Let’s talk about some financial wellness and planning considerations that may look a little different if you or your family are part of the LGBTQ+ community.


LGBTQ+ Family Planning Costs

There are many ways to grow your family, and all of them require at least a certain level of planning ahead, financially speaking. Let’s say you’re interested in bringing a child into your life but are unable to do so without external support. In that case, this may mean planning for some surprisingly large expenses such as adoption, in-vitro fertilization (IVF), surrogacy, or other methods. The costs of adoption depend primarily on the method you use (whether you’re arranging things privately or through an agency), and can be upward of $40,000 for domestic adoptions, and $70,000 for international adoptions. In-vitro fertilization or IVF can be quite pricey, too. According to MoneyGeek.com, the average cost of a successful fertilization and implantation process is between $45,000 and $70,000.


Surrogacy is typically the most expensive option, often costing from $90,000 and $130,000 between medical bills, legal fees, and surrogate compensation according to WestCoastSurrogacy.com.


Some LGBTQ+ family planning routes are more affordable than others, but many if not all will require a little bit of forethought. If growing your family is in your future, it may be worth looking into solutions for putting money aside for that, starting now! If you’d like to discuss which options are best for you and your plans, we’d love to help.


LGBTQ+ Retirement Planning

Everything from legal challenges to pay inequality can mean extra challenges for LGBTQ+ community members.


According to a study performed by the Williams Institute at UCLA School of Law, 22% of LGBTQ+ people in the United States live in poverty, as compared to 16% of straight, cisgender people. The poverty rate for LGBTQ+ individuals in rural areas is even higher (26%).


Pair that with Prudential’s 2016/2017 LGBT Financial Experience Research Report findings, which show that members of the LGBTQ+ community tend to earn less on average than their straight, cisgender counterparts (with bisexual women earning least of all, on average), and it follows that LGBTQ+ individuals may be less likely to be able to save as much for their future and retirement.


Add to these issues the fact that fewer LGBTQ+ individuals are likely to be in a legally protected partnership (such as a marriage) than cisgender, straight couples, and planning for retirement can become a little bit tricky.


Another factor that is important to consider is that in the same Prudential study, LGBTQ+ respondents reported feeling less prepared and knowledgeable when it came to understanding how to make wise financial decisions, often mentioning that they don’t even know where to start.


Prudential’s study also mentioned that “LGBT respondents are more likely to consider themselves ‘spenders’ than are general population respondents,” making saving a much more difficult goal for those who classify themselves this way. Can you relate? We have some tips that can help anyone in this situation.


It’s a great idea to consult with a financial professional and even a legal professional if needed to ensure you understand which options may suit your goals and plans. Looking for guidance? We’re happy to help!


Estate Planning for LGBTQ+ Individuals & Families

While the 2015 Supreme Court decision in the case of Obergefell v. Hodges granted same-sex couples the legal right to marry and enjoy the spousal benefits therein, it didn’t erase all obstacles to end-of-life planning for members of the LGBTQ+ community.


Here are some things to think about where end-of-life and estate planning for LGBTQ+ individuals are concerned:

  • Are you married to your partner? If not, you may need to consider additional steps to ensure that your partner is legally recognized as your representative in certain matters.

  • If you’re not married and your partner is inheriting part or all of your estate, are there any state estate taxes where you live or that the size of your estate makes you responsible for? If so, according to NOLO, you and your partner may need to plan for estate taxation.

  • Do you have a will? If so, is it up to date and accurate with regard to your wishes?

  • If you have a pension or another retirement savings plan, are there any stipulations regarding benefits for same-sex partners?

  • Have you ensured that the beneficiary designations on applicable accounts are up to date?

  • Do you have a health care directive in place that designates whom you’d like to make decisions for you should the need arise?

  • Do you have a Power of Attorney document in place, if appropriate, that would similarly designate whom you’d trust to make financial and other decisions for you if you were to need representation?

As you may have noticed, most of these considerations require working with a legal professional who is experienced in estate matters, while others may require assistance from a financial professional.


Thankfully, not every decision about your money will be dictated by your sexual orientation, gender identity, or any other reason to count yourself a part of the LGBTQ+ community. Budgeting basics hold pretty much the same no matter who you are.


How To Know if an Investment Is LGBTQ+ Friendly

Thanks to the growing body of investments that meet ESG standards, these days it’s easier and easier to know if an investment you’re putting your money into will use your money in ways you agree with while it’s invested. Worried your money won’t do as well with investments that are more responsible by environmental, social, and governance standards? Thankfully, that’s a myth.


If you’re an LGBTQ+ community member or ally looking to put your money to work for you in ways that are more supportive of yourself, your family, and your community, we’re happy to help you find ways to do so! Take our brief quiz to learn more about your own unique views on investing. Think of it as a personality quiz, but for matching with investments that suit your goals and morals!


LGBTQ+ Investing: The Bottom Line

LGBTQ+ individuals, couples, and families face certain obstacles that can make reaching their financial goals more difficult. Fortunately, there are quite a few solutions that can help! Becoming well versed in budgeting basics, planning for growing your family as you see fit, ensuring you’re taking the appropriate steps to plan for retirement and checking off some important financial and legal boxes can go a long way toward setting you up for the kind of success you want in your financial future.


Additionally, investing your money in ways you agree with is a great option for those concerned about the social, environmental, and governance aspects of investments.


Whether you have questions or concerns or you just want to get an expert’s perspective on your own financial picture, we’d love to help!


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