Will retirement be better or worse for the LGBT Community? While the LGBT community is benefiting from increasing financial prosperity and legal recognition, many economic challenges hit us harder than they do for straight citizens. Like everyone else, we are currently facing a gay retirement planning crisis but one that may well go beyond the risks of the rest of America. Keep reading as your gay financial planner LA outlines some common LGBT retirement issues facing our community.

News flash, baby boomers did not die before they got old.  In fact, approximately 10,000 boomers turn 65 every day.  Unfortunately, we’re in the midst of a pending retirement crisis because many people in this country do not have a plan to cover their basic living expenses through what could easily be 30 years of retirement, not to mention medical costs or the inevitable challenges that come with advancing years.  The ripple effect of this lack of a financial safety net­ ­– and trust me, Social Security is not going to come to the rescue here – for such a huge population could well spell an economic catastrophe in the years to come.

As a group, the LGBT community faces a slew of additional retirement issues and appears to be even less prepared than some of our straight counterparts, whose fiscal responsibility is nothing to write home about, to begin with. It is not a stretch to say gay retirement planning is often more complicated and difficult than retirement planning for the average American.

SAGE (Services and Advocacy for GLBT Elders), the largest and oldest organization dedicated to improving the lives of lesbian, gay, bisexual and transgender seniors, produces some of the most valuable information on aging issues facing our community. Their Out and Visible study offer up some sobering insights when it comes to money and retirement for LGBT Retirement Issues.

Four Big LGBT Retirement Planning Issues:

• LGBT people are less likely to seek expert financial guidance:

• Retirement planning is complex enough on its own, but add all the complications caused by the various levels of marriage equality and the picture can get overwhelmingly confusing. That said, we really next expert advice we can trust.  Unfortunately, the average financial advisor is a late-50’s white male, which statistically means he is a lot more likely to be socially conservative, and a lot less likely to be up on the current status of gay financial planning law. This may explain why just 28% of LGBT respondents reported that they were working with a professional retirement planner (compared to 37% of the general population.)  Many are not working on the Fiduciary Standard 100% of the time.   Translation Gay or Straight they are not legally required to put your best interests ahead of their own.  Make the effort to seek out a gay financial planner to make sure you have the most fabulous gay retirement plan.

• Many LGBT people are still in the Closet to Financial professionals:

• I’ve met many people afraid to come out to a financial person. While my (gay-owned) financial planning firm DRM Wealth Management is based in Los Angeles and Palm Springs, I’m well aware of the pressures facing those who do not live in socially progressive locales. In fact, I work with many LGBT couples across the country who are deathly afraid of anyone finding out their sexuality.  Oftentimes we’ve had to get creative with their financial plans to protect their privacy as a couple, while at the same time keeping any on paper connections between the two partners to a minimum.  Picture trying to make sure your 401(K) goes to your significant other, but you won’t/can’t put their name down on the beneficiary form for fear of losing your job.  (In many states people can still be fired for simply being gay.)    When same-sex couples are not legally married we can run into a whole slew of tax, retirement and estate planning issues. (That can mostly be addressed with proactive gay financial planning guidance).

•  LGBT people often have smaller support networks:

• Too many of today’s LGBT boomer and elder seniors are estranged from their families, are less likely to have children and more likely to live alone.  This smaller support network is a real detriment in retirement where family help ­–  from simply helping get to and from doctor’s appointments to more complex things like taking over finances ­– is so essential.

The investment firm Fidelity recently estimated that someone who retires today can expect to spend $300,000 on medical expenses in retirement, OUT OF POCKET, AFTER INSURANCE HAS PAID!!!!   Lacking support, those costs may climb significantly higher for the LGBT seniors who have to pay for services and logistics that family members do for free. Doctors’ visits will cost the same of course, but the money for someone to drive you or take care of you has to come from somewhere. Where?

• Some LGBT seniors are not out to their healthcare providers:

• We’re still not out of the woods when it comes to universal health coverage and many closeted seniors are concerned about receiving inferior care in the case they do come out. Combine this with a higher incidence of HIV+, and we have a recipe for some big health care issues in retirement. Will you be able to easily receive adequate medical care in the location you are planning to retire to?

• Many LGBT lives are devoid of financial planning milestones:

• Some fairly typical life events that trigger sitting down with a financial planner simply don’t happen for a large sector of our community. These often include motivating things like the birth of a child, marriage or even things as simple as filing taxes jointly. Without a little extra push, it’s quite easy to put your head in the sand and ignore the future.  I can’t tell you how many times I’ve heard from my retired gay clients (particularly those who came of age during the AIDS crisis), “I never thought I’d be alive at this age.”

In our youth-obsessed gay culture, it’s all too easy to forget that getting older means that you’re actually doing something right. You can deny it all you like and mainline Botox until the cows come home, but the fact is that if you plan on sticking around, you’re going to want to plan for the inevitable financial challenges that are in the pipeline too.  This is not the time to put your head in the sand. But, better to face facts now and secure the services of a professional who can get you on track for financial independence for, literally, the rest of your life.

As for me, my husband and I have just opened an account to save for twin Ferrari wheelchairs for when we turn 120. Just to make sure we can afford someone really cute to push us around.

Live for Plan for Tomorrow. Remember Gay Money Matters!

DAVID RAE, CFP^®, AIF^® is a gay Los Angeles Financial Planner with DRM Wealth Management. He has been helping friends of the LGBT community reach their financial goals for over a decade. Nightline has called him a “Tax Wizard in an Expensive Suit” He is a regular contributor to the Advocate Magazine, Forbes.com, Investopedia and Huffington Post as well as the author of the Financial Planner Los Angeles Blog. Follow him on Facebook or via his website www.davidraefp.com

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