Aging and the LGBTQIA+ community

This article will ... Describe the effect of lower lifetime earnings on the ability to build wealth and save for retirement. Explain why housing insecurity negatively affects physical and emotional wellness. Outline the reasons LGBTQIA+ seniors should not overlook estate planning, regardless of their net worth.

Growing old is a gift, but it doesn’t come cheap. Seniors on a fixed income often struggle to make ends meet as living expenses climb, a financial reality that disproportionately affects the LGBTQIA+ community.

Indeed, adults who identify as LGBTQIA+ experience higher rates of economic insecurity as they age, along with unique health disparities that make it more difficult to meet their savings goals.

The biggest roadblocks to financial wellness for LGBTQIA+ seniors include:

• Lower lifetime earnings.
• Smaller retirement account balances.
• Higher probability of being a single-income household.
• Housing insecurity.
• Lack of access to affordable and affirming health care.
• Estate planning challenges.

With proper planning and awareness of the support services that exist, however, any hurdle can be overcome, said Lisa Krinsky, director of Fenway Health’s LGBTQIA+ Aging Project, whose mission it is to help LGBTQIA+ older adults age with dignity and respect. “There are plenty of folks with limited means who find ways to have rich and fulfilling experiences as they age,” she said. ”You can’t change your income or how much you have saved at age 70, but you can find the support resources you need to have the best quality of life possible.”

Lower lifetime earnings

According to an analysis by the Human Rights Campaign, LGBTQIA+ workers earn about 10 percent less on average than their heterosexual and cisgender peers.¹

But LGBTQIA+ people of color, transgender women and men, and nonbinary individuals earn even less. LGBTQIA+ Black workers earn 20 percent less, while transgender women earn roughly 40 percent less than the average U.S. worker earns. The wage gap for LGBTQIA+ working women remains at 13 percent.

Many LGBTQIA+ seniors today, however, experienced an even larger pay gap for most of their career, when workplace discrimination was more blatant.

Lower lifetime earnings make it harder to build wealth. It delays (or negates) the ability to purchase a home, which for many Americans is their largest asset. And it reduces disposable income, so there’s less available for an emergency fund, which can perpetuate a cycle of debt.

Some 47 percent of LGBTQIA+ adults described their debt level as fair or poor, compared with 39 percent of non-LGBTQIA+ adults.² (Related: How to set and prioritize debt elimination goals)

Less saved for retirement

Smaller paychecks make it harder to save for retirement too.

LGBTQIA+ older adults are statistically less prepared for retirement, a by-product of lower incomes, fewer employment opportunities, and, in some cases, health conditions linked to societal stigma and discrimination (including a higher risk of anxiety and depression) that make it more difficult to maintain a full-time job.³

According to advocacy group SAGE, LGBTQIA+ workers are slightly less likely than non-LGBTQIA+ workers to have an employer-sponsored retirement account, such as a 401(k) — 35 percent versus 40 percent. And they are far less likely — 18 percent versus 30 percent — to have an individual retirement account (IRA).⁴

When they do have retirement accounts, LGBTQIA+ individuals still lag behind their heterosexual/cisgender peers by 25 percent, on average, in terms of retirement savings, according to the Federal Reserve’s Survey of Consumer Finances.⁵ (Learn more: LGBTQ+ retirement challenges -- and solutions)

That LGBTQIA+ individuals of all ages are more likely to be single-income households makes it harder still to achieve retirement readiness, forcing many to rely on limited savings and only a single Social Security check as they age.

Perhaps that explains why LGBTQIA+ Americans are particularly interested in financial products that provide guaranteed income for life, including annuities. Indeed, the Employee Benefit Research Institute reports that middle- and upper-income LGBTQIA+ Americans prioritize income stability in retirement over maintaining wealth.⁶

“Everyone should begin financial planning as early as possible, regardless of how they identify,” said Joy Avedesian, a managing partner with Capstone Partners in Denver, Colorado. “The challenge for the LGBTQIA+ community has been access to financial planning professionals who understand their community and provide expertise in a safe, discrete, judgement-free environment. But the profession is starting to understand that the needs of Americans aren’t all the same.”

Housing

LGBTQIA+ seniors face significant hurdles when it comes to housing, starting with access.

With less saved for basic living expenses in their retirement years, LGBTQIA+ individuals have higher rates of poverty, lower rates of homeownership, and higher rates of homelessness, according to a report by the UCLA Williams Institute.⁷

Many, it found, face an array of stigma and discrimination that undermines their ability to find safe, stable, and affordable housing, noting that federal, state, and local laws provide only a patchwork of protections against anti-LGBTQIA+ discrimination in housing, lending, and social services.

Still today, half of all LGBTQIA+ elders live in a state where they can be legally denied access to housing and public accommodations, according to the National Alliance to End Homelessness.8

And according to a 2022 report by the AARP, 41 percent of LGBTQIA+ individuals said they were at least somewhat concerned about future housing discrimination as they age because of their identity.⁹

Housing instability affects quality of life in a number of important ways, potentially making living conditions both physically and emotionally unhealthy:

• It leads to higher stress levels.
• It makes it more difficult to focus on self-care.
• It may increase isolation when there’s nothing left in the budget for social engagement.
• It increases vulnerability to harassment, violence, and injury from caregivers at home or in an assisted living facility.

SAGE provides a list of housing resources to help LGBTQIA+ people of all ages understand their rights and find access to safe, affordable housing options. The U.S. Department of Housing and Urban Development also offers assistance for those experiencing homelessness.

Access to affordable and affirming health care

Access to affordable and affirming health care is a persistent problem for elders in the LGBTQIA+ community, many of whom still keep their sexual orientation or gender identity secret from doctors and caregivers for fear of discrimination.

According to Funders for LGBTQ Issues, more than 10 percent of LGBTQIA+ older adults have been denied health care or received inferior care due to their sexual orientation or gender identity.¹⁰

The cost for health care services can be prohibitive for the LGBTQIA+ community, as well. Nearly half (46 percent) of individuals who have received some form of gender-affirming care report that they have spent $5,000 or more on out-of-pocket costs.¹¹ And those who seek mental health support often find it difficult to find culturally competent care.

The Human Rights Campaign provides a list of mental health resources in the LGBTQ+ Community, as does Mental Health America and Fenway Health in Boston, Massachusetts, which offers both in-person and telehealth appointments.

Given that they are less likely to have children or be married, LGBTQIA+ adults may also have fewer caregivers available to them. Thus, many are forced to outsource costly assisted care services as they age.^12,13

But Krinsky notes that many in the LGBTQIA+ community have created “families of choice,” who excel at stepping in and providing physical and emotional support when needed. Fostering those tight-knit social circles, she said, can go a long way toward bridging the gap in caregiver support.

Estate planning and legal issues

All adults should take steps to protect their interests and their loved ones through proper estate planning. But the need is potentially greater in the LGBTQIA+ community.

Unless an LGBTQIA+ elder has specific legal documents in place when they die, state laws could hand over financial decision-making and any assets left behind to a former spouse or blood relative rather than a surviving domestic partner.

Estate planning attorneys add that challenges remain for many LGBTQIA+ older adults who entered into legal unions before marriage was even an option. A careful review of their existing estate planning documents, especially those drafted before 2015 when same-sex marriage was legalized, is essential. (Learn more: Estate planning for LGBTQ couples)

The essential estate planning toolkit includes the following:

• Will — describes how you want your assets distributed after you die.
• Living will — defines your wishes for end-of-life care.
• Healthcare proxy — designates a person you trust to make health care decisions on your behalf if you are unable to do so.
• Power of attorney — designates a person you trust to handle your financial affairs if you become ill, injured, or mentally incapacitated.

An airtight estate plan can help LGBTQIA+ adults ward off legal challenges by family members who may not accept them, and provide protections for nonbiological parents and their adopted children.

Here, again, Avedesian stresses the need to work with a financial professional who respects and understands the unique needs of the community.

“Through proper estate planning, you get to control where your assets go, and often, you need support in this process,” she said. “You may be conditioned or guilted into feeling that you must direct your assets to your non-supportive existing family members, and if it’s a conversation that brings up painful memories, you may avoid having it altogether. A proactive advisor will have an affirming estate planning attorney relationship — that is, an attorney who recognizes same-sex or alternative relationships — so that you feel safe talking about your actual desires around end-of-life care and wealth distribution objectives.”

Many of her clients, she said, are unaware that they can direct funds to charities or organizations of their choosing after they pass away, because conventional planning has always centered around the “traditional” family.

Conclusion

LGBTQIA+ seniors face a unique set of challenges on the path to physical and emotional wellness, but they’re not in it alone.

By cultivating social connections, working with trusted professionals, and utilizing support services as needed, members of the community can help ensure that they grow old according to the rules by which they have always lived — with dignity and determination.

Discover more from MassMutual…

LGBTQ+ marriage perks

LGBTQ+ retirement challenges (and solutions)

Need a financial professional? Find one here

________________________________________