Members of the LGBTQ+ community are no strangers to overcoming hurdles. Whether it’s fighting discrimination in the workplace or demanding equal rights for same-sex couples, there is still a long way to go in many parts of the world to gain true equality for those who identify as LGBTQ+. And there is no shortage of hurdles when it comes to financial planning for this community.
Here we outline five financial planning challenges that are faced by the LGBTQ+ community:
1. Retirement savings shortfall 🏳️🌈
These days saving enough money to retire comfortably is difficult for many of us but it is even more so for the LGBTQ+ community who are up against the gay and transgender pay gap as well as discrimination when it comes to hiring and firing. Obviously those earning less during their working lives will be putting less aside for their pension. Research in the US has revealed that same-sex couples tend to have lower median retirement savings than straight married couples: $66,000 compared to $88,000.
If you are LGBTQ+ and you are concerned about not having enough saved for a comfortable retirement, now is the time to address the issue. I highly recommend that you see a professional financial adviser who can help you understand the options available to you, whatever your age.
2. Inheritance for same-sex couples 🏳️🌈
LGBTQ+ rights are, thankfully, advancing, especially in the area of same-sex marriages, which is becoming legal in an increasing number of countries. Unfortunately, by no means all.
In many countries where same-sex marriage is not recognised, including some parts of Asia, there are rights which straight people take for granted but which can be huge hurdles to members of the LGBTQ+ community. A major issue for same-sex couples who cannot marry legally in the country in which they are resident is that of inter-spousal transfers of assets when one of the couple dies. If a union is not legally recognised, the couple will not benefit from the inheritance tax exemptions applied to spouses. Again, it is worth taking financial advice to discuss with a specialist if there are solutions to this issue that can be put in place.
3. Rights for same-sex expatriate couples 🏳️🌈
Expatriate same-sex couples who marry in their home countries and wish to locate to countries where same-sex marriage is not recognised can come up against issues related to immigration, employment and death benefits for partners.
Even where same-sex marriage is recognised, it is taking time for legislation to catch up which can affect issues such as survivor benefits. In some cases a same-sex spouse still does not receive the same benefits as a straight widow.
4. Estate planning 🏳️🌈
A will is an important part of a sound financial plan for everyone but possibly even more so for the LGBTQ+ community. Sadly, in many cases family are not on board with a desire to leave an estate to a same-sex partner or spouse and forced heirship laws may come into play. It is advisable to get your wishes in writing and to take advice on the laws that apply in the jurisdiction where you hold assets.
5. Investing ethically 🏳️🌈
ESG (environmental, social and corporate governance) investing is moving into the mainstream but I have found that the LGBTQ+ community is even more sensitive to ESG issues than the general population. Socially responsible investing is of great importance to many LGBTQ+ individuals to uphold their personal values, support companies that reflect their beliefs and avoid those that go against them.
Financial planning is important for all of us but if you are a member of the LGBTQ+ community, you will have particular financial needs to address. We would be happy to discuss your situation with you and help you to put together a sound financial plan to ensure that you can achieve your goals.
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