Financial Plan for LGBT Couples

Financial Plan for LGBT Couples

Some Financial Advice for LGBT Couples

At first glance, it seems superfluous to have financial advisors for LGBT couples. What does sexuality have to do with any of it? Why would straight-couple budget control be different to how gays handle their finances? Well, you may say they aren’t, but the reality is that most same-sex couples face more obstacles than straight couples.

In 2015, same-sex marriage became legal in the United States. Before that, LGBT couples couldn’t be legally recognized as a couple, and they simply didn’t have a financial plan of their own. In 2016, a year after the legalization, a survey showed that LBGT couples had fewer retirement and savings plans. Additionally, they usually didn’t have a will or estate plans, nor any form of life insurance. Well, it’s time we changed that. Let’s take a look at some money tips for gay couples!

All Married Couples Should Have a Financial Plan

Regardless of your sexuality (and your partner’s gender), any domestic partnership should have a financial plan if it wants to thrive. It’s not just about having health care and filing joint income tax returns. It’s about the long term. 

A financial plan will let you be prepared for the next 20 or 50 years. It will also take into account unexpected events, for example, unemployment or illness. Without a plan, if you suddenly lose your job, you feel stranded, and there’s uncertainty about it. A financial plan can change that. Additionally, it will also allow you to establish clearly your financial priorities and cut (and increase) costs accordingly.

We’ve split our financial plan tips into the five most important categories. Let’s get into each one!

Retirement Planning

Let’s take a look at the following numbers to illustrate the difference in retirement plans between gay and straight couples. Just 18% of all LGBT Americans have an IRA (individual retirement account) that their employer does not sponsor. Compared to that, 30% of the general public has an IRA. That’s a significant difference. 

The best way to plan your retirement is by participating in your company’s 401(k). If you stash just 5% of your earnings to the 401(k), which your employer will match, you already have a savings rate of 10%!

However, if your company doesn’t provide the option, then an IRA is your best friend. The IRA lets you save money tax-free (or tax-deferred in some cases), and the sooner you start it up, the easier it will be to accumulate wealth for your post-working days. Here’s an ultimate guide for retirement planning for 2021.


The percentage of LGBT couples with a savings account is 40%, compared to 47% of straight couples. A savings account is crucial if you want to be ready for rainy days. Without any savings, you’re relying on always being employed, the global economy never hitting you hard, and always having enough money to do anything you want. That’s a great way of thinking if you live in Fantasyland. But you don’t — you live in the United States. You never know when financial instability might hit you. Just take a look at 2020 and how pandemic unexpectedly hit virtually all businesses.

Savings are there to keep you stable during turbulent times. What’s more, without savings, you can’t really afford larger purchases, such as a car, a house, etc. With a savings account, you will feel greater financial freedom, and it’s less likely you’ll end up in debt.

Estate Planning

Similarly to the two above, LGBT couples are behind straight couples in this regard as well. Only 19% of LGBT people in the United States have a will or an estate plan, 7% less than the others.

You can view estate planning as part of your retirement plan. With an estate plan, you decide what happens to your assets once it’s time for you to move on from this life. When you list your beneficiary designations, your loved ones will be able to inherit your wealth with lower tax payments. On top of that, you get to choose who will be in charge of your assets and their distribution.

Many LGBT people had issues with their elders when they came out. With an estate plan, you can put your loved one in charge of your assets and skip those who have made a damaging impact on your life.

Emergency and College Funds

In 2017, the Supreme Court ordered all 50 states to treat same-sex couples equally to straight couples when it came to issuing birth certificates. What this means is that today, all across the United States, LGBT couples are able to adopt children without any legal obstacles.

While children are a blessing, they are also a bill you need to pay. Back in 2017, the USDA reported that it would cost $233,610 on average to raise a child. That translates to $13,000 per year for 18 years successively. And that’s just the first 18 years. What happens when they leave for college?

College is expensive, so it’s important you plan ahead for it. Having a 529 (college savings) plan will let you dedicate peppercoin sums to your child’s college expenses when you have the means to do so. Over the 18 years, you will be able to accumulate enough funds for your child not to feel insecure about housing and food.

The same goes for your emergency funds. Let’s say you have a sudden loss of housing, emergency medical expenses, or someone in your family dies. These are all financially challenging times. You don’t really expect them, but that doesn’t mean you shouldn’t prepare for them!


Finally, we have insurance. As you know, there are different types of insurance, the most common two being life and health insurance. It all depends on your situation which one you need. If you’ve adopted a child, you should take a look at some life insurance policies. In case of untimely death, your child won’t be stranded in the wild.

Another important aspect is health insurance. Around 79% of LGBT Americans have one, which is 7% less than straight people. For instance, this is particularly frustrating for transgender people. Health care coverage often doesn’t take into regard the costs of transitioning and potential issues that come with it. 

Do I really need a health insurance? Find out here.

Similarly, we have long-term care insurance. That way, you will be able to afford a room in a nursing home, making yourself be prepared for the unknown. Most senior Americans rely on their adult children to take care of their health care and nursing home costs. Today, LGBT seniors who couldn’t adopt a child are on their own when it comes to this. Financially planning your future is paramount for everyone, especially for the LGBT community.