LGBT retirees: golden years often far from glittering
Written by Philip Howell-Williams on February 20, 2015.
Retiring can be difficult if you haven’t prepared properly for it but for the straight community, if you have been prudent and kept to a sound financial plan during your working life, it is possible to ensure that your golden years are just that and that your assets and entitlements can be passed to your spouse upon your death. For the LGBT community, however, there are additional barriers to a comfortable retirement which can make it a particularly difficult time for this sector of the community.
When the generation now entering retirement were starting their careers the very existence of gays was little acknowledged. Throughout their working lives members of the LGBT community will have come up against challenges which straight workers will not have had to face including lower incomes, discrimination in the workplace affecting their career development and higher unemployment. These factors have inevitably affected the ability of LGBT workers to contribute towards a pension.
The figures bear this out. According to a recent survey carried out in the States same-sex the average retirement savings for a straight married couple are around $88,000 compared to just $66,000 for a same-sex couple. Another survey revealed that only 14% of LGBT adults between the ages of 25 and 68 felt ‘well prepared’ for retirement.
In addition, LGBT couples in many countries face one huge problem that straight retirees don’t: accessing survivor benefits. While straight widows or widowers will have entitlement with regard to the transfer of social security payments and pensions to a surviving spouse as well as exoneration from inheritance tax on bequests from a deceased partner, in countries where same sex is not legal gays will have none. For example, whereas in the UK subsequent to the passing of the Marriage (Same Sex Couples) Bill in July 2013, LGBT couples enjoy equal rights, in Hong Kong, and most of Asia, there is no legal recognition of same-sex couples.
In the US, laws vary from state to state so it is possible that a gay couple living one side of a state border are denied survivor benefits while on the other side a gay or lesbian widow can access them.
It is as a result of these various factors that adults who are LGBT tend to be worse off both financially and physically in their supposedly golden years, with the added difficulty that they rarely have children to look after them in their old age. Statistics bear this out with 15.9% of gay men over 65 in the States living on or below the poverty line compared to 9.7% for their straight peers.
If you are in a same-sex relationship there are certain steps you can take to protect your partner after your death. This is why if you are a member of the LGBT community it is crucial to take specialist financial advice from a professional who understands the unique needs of this demographic and can help you put in place a financial plan which takes into account the laws (or lack of) regarding survivor benefits for same-sex couples.