Big Payday for Gay Married Couples
The Real Money Advantages of Gay Married Couples
It’s official, people; same-sex married couples are living proof that it pays to be gay.
By David Rae Certified Financial Planner™, Accredited Investment Fiduciary™
We all know the stereotype of the typical gay man – indeed, many of us are the stereotype – uber- successful, well-dressed fellows strolling around P-town, Fire Island and other glamorous haute spots. This pervasive image is a double edge though because it fails to acknowledge that just like any other demographic, our socioeconomic diversity, for both gays and lesbians, includes those toiling below the poverty line as well as those prospering at the highest echelons.
The numbers don’t lie
What interests me most are couples, however. To get an accurate view of the state of gay household finances, I headed over to new report from the United States Department of the Treasury that provides a fairly accurate financial assessment of same-sex marrieds in the U.S.
Well hallelujah my brothers, I’m happy to announce that gay married men, making on average $176,000 per annum as a couple, clock in at 56% ahead of the income of our married straight counterparts. And really big winners of the income-earning contest are gay married couples with children who bring in a whopping $276,000 a year on average. (Of course, DINK (double income no kids) gay couples lead the way in disposable incomes of which, in my opinion, they’re disposing way too much and not saving enough, but that’s another story.)
Related: Are Gays Better With Money?
Lesbian couples aren’t doing too poorly themselves either in bringing in a household average $124,000, which puts them financially ahead of the average straight married couple who earn a yearly $113,000. Of course, nothing justifies the egregious gender pay gap that we’ll also be exploring in more depth in the future.
So what gives? How do we explain the significant income disparities between married heterosexual couples and married same-sex couples? The Treasury Department’s report offers some trenchant insights:
- Birds of a feather – Gay Married Couples
A large proportion of LGBT couples flock to major metropolitan areas – sophisticated seats of power and centers of media, culture and consumerism – many of which are located on the coasts. These places tend to have higher cost of living but at the same time are the locus for jobs offering commensurate higher pay. Of course gay folks live everywhere but we are significantly better represented in what some would describe as more desirable cities that are, as it happens, the most gay-friendly as well. Let’s see . . . would you rather live in Manhattan, L.A., Miami or San Fran as versus, say, the stomping grounds of Christian Supremacist V.P.-elect Mike Pence in Indianapolis or of homophobic Pat ‘The Great Discriminiator’ McCrory’s Raleigh, North Carolina (no offense to the good people of Charlotte and other towns who worked so diligently to enact LGBT rights ordinances)?
It should be noted, that heterosexual couples do in fact actually earn more than same-sex female couples when you compares couple who live in the same three-digit ZIP code regions. My guess is lesbian couples in part earn more than the average straight couple has more to do with location than sexual orientation.
- Where the boys are
Millennia of male privilege and entrenched economic sexism mean that men still make more than women do. Unfair, sure. Unexpected, not so much. It follows that two men make more than a male/female couple and certainly more than two women together. But here’s the twist; lesbian married couples on average actually earn more than their straight counterparts. Hmmmmm.
- Honey, we had the kids
The Treasury Department report also states that same-sex female couples are four times more likely than their married gay male peers to have children, a fact that comes as a surprise to absolutely nobody. What the study doesn’t differentiate and would be interesting to know is the difference between the lives of lesbian mothers who have had children through prior heterosexual conjugation, as versus those handling procreation with their female spouse.
Gay married men with children bring in the biggest bucks of all as I noted above; a good thing because without a very understanding, supportive and fertile female friend they’re going to need them. Victims of a perfect storm of physiology, bureaucracy and prejudice, gay male marrieds need to jump through the most hoops and shell out the greatest expense to add a child to their family. Adoption can easily run $30,000 or more (where it is even possible) and that pales in comparison the cost of a surrogate that can run up to $250,000 or more.
Financial detective work
Marriage statistics are not easily tracked at the federal level. So truly assessing the lives and pocketbooks of LGBT couples (gay, lesbian and everything else that falls within the queer spectrum) can be quite a challenge. Homophobia is alive and well and many people don’t always out themselves to census workers, or on other surveys. However, the one place where people do reveal their orientation is when filing taxes as part of a couple. (It’s a pretty safe assumption that if you’re in a same-sex marriage you are indeed gay. But it’s an assumption nonetheless; one doesn’t necessarily have to be homosexual to marry someone of the same gender. Marriage equality legalizes same-sex unions but doesn’t actually require the two in that union have to have sex with each other.)
The Treasury Department study is based on the tax returns of same-sex couples filing jointly in 2014, which gives us the most accurate picture of same-sex marriages to date. (Side note, 2014 is the year I married my handsome husband Ryne, and we filed jointly for the first time with our 2014 tax returns.) In 2014 there were 183,280 same-sex married couples in the USA, which breaks down to roughly one third of one percent (that’s roughly 1/300th) of all marriages. The actual number of gay couples may be a tad higher as not all of them file jointly though it’s been estimated that something around 97.5 percent of married couples do file joint returns. Regardless, the number of gay marrieds filing jointly will inevitably rise.
My previous post “How Love and Marriage will change LGBT Retirement.” emphasizes that having the legal right to wed will help the financial well being of the LGBT community as a whole.
Earnings vs. wealth
However, though the Treasury Department report shows that many same-sex married couples are doing well on the income side, it has yet to be determined how we are doing on the wealth-building side. Remember, it’s not so much about what you make that is important but rather what you keep, save and invest that will build your nest egg. Whether you are at an advantage or disadvantage financially, you’ll want be proactive and take steps to reach your various financial goals for yourself and your family. No matter who you are or what your sexual orientation, without hard work and strategic financial planning you will have a tough time reaching financial independence.
Congratulations to all couples who are spending their lives with someone they love. Though we’re still woefully behind on transgender financial parity, the LGBT community is moving forward and making significant progress. No longer relegated to second-class citizen status, you and your significant other can at last enjoy the thousand-plus benefits that the government bestows on the legally married of every stripe.
Related: LGBT Newlyweds Guide to Money
Until next time and as always Be Fiscally Fabulous. GAY MONEY MATTERS!
DAVID RAE, CFP®, AIF® is a Los Angeles-based retirement planner with Trilogy Financial Services. He has been helping the LGBT community and friends reach their financial goals for over a decade. A regular contributor to the Advocate Magazine, Investopedia and Huffington Post, he lives in West Hollywood with his husband Ryne and their two Chihuahuas. Follow him on Facebook, or via his website www.davidraefp.com
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