LGBTQ+ Financial Planning: Some Important Considerations

While many important advances have been made in recent years in both the legal and social landscape, LGBTQ+ individuals still face many unique challenges, many of which have financial implications. This means that LGBTQ+ persons, whether single, partnered, or legally married, need financial planning advice that recognizes and takes into account these special challenges.

Let’s take a look at a few of these situations and consider how financial planning can provide a clearer path to achievement of important goals.

Marriage and Family Planning

One of the most important developments in recent years for the LGBTQ+ community is the 2015 Supreme Court decision in Obergefell v. Hodges that legalized same-sex marriage in all 50 states. Prior to this, same-sex couples in the same type of long-term, committed relationships as heterosexual couples had none of the legal rights and protections enjoyed by those in heterosexual marriages. After Obergefell, same-sex spouses have rights to spousal Social Security benefits, pensions, and coverage from a spouse’s health insurance, all of which are major financial advantages.

For same-sex couples who want to start a family, however, the challenges can still be different than those heterosexual couples deal with. For example, couples who choose to adopt can expect to spend anywhere from $20,000 to $50,000, depending on whether the adoption is domestic or international. In-vitro fertilization (IVF) can run $15,000–30,000, with increased costs for each attempt. Surrogacy is generally more expensive than either of the preceding options. Couples or single individuals who desire to raise children need to take these costs into account as they plan their savings budget.

Debt Management

According to the website Student Loan Hero, LGBTQ+ individuals carry more student loan debt than their cisgender and heterosexual peers: an extra $16,000, on average. Obviously, going into a career with an increased student loan burden can increase stress and lead to other health problems.

In fact, various types of debt appear to be a major concern of many LGBTQ+ persons; a survey by the credit reporting agency Experian indicated that the second-biggest financial worry of LGBTQ+ respondents was paying off debt, and a whopping 70% of respondents reported using credit cards to pay for necessities.

Obviously, the number-one barrier to financial security is out-of-control debt; that’s true for everyone. But LGBTQ+ individuals may need to take some extra steps to get and keep their debt under control. It may be more important for them to establish and contribute regularly to an emergency fund so that they aren’t forced to reach for a credit card when the unexpected happens. They may also need to allocate a larger percentage of income to debt reduction early in their careers in order to allow for a higher savings rate, later on.

Estate Planning

Especially for couples who are not legally married, it is vital to have properly drawn estate planning documents, including a valid will, medical directives, financial powers of attorney, and updated beneficiary designations for all insurance and annuity policies and retirement accounts. For example, in the absence of a valid medical directive, if one of the partners was incapacitated, medical personnel would likely require consent to procedures and treatment from a family member, bypassing the individual’s significant other, even if the ill person is not presently close to their family. With a medical directive, however, the decisions will be made by the person whom the now-incapacitated person trusts. Similarly, a valid will permits the testator (the person signing the will) to direct how their estate will be distributed in the event of their passing. Without a will, however, the state is at liberty to distribute the estate as it sees fit, which could mean ignoring the significant other in favor of family members—even it that would not be the wish of the deceased.

Even for couples who are legally married, all the above matters are essential to address with the drafting of properly designed estate planning documents. Additionally, it’s important to make sure that property such as real estate and banking or investment accounts are titled in coordination with your will. For example, an account that is titled as “joint tenants with rights of survivorship” will pass directly to the surviving tenant.


In a 2021 survey, the Transamerica Center for Retirement Studies found significant disparities in retirement readiness between LGBTQ+ individuals and heterosexual persons. For example, LGBTQ+ persons were more likely to be working part-time jobs that allowed them less opportunities for savings and investment. They were also less likely to have access to a 401(k) or other employer-sponsored retirement plan (which is one of the principal indicators of success in saving for retirement). Not surprisingly, they were also less likely to feel confident about their ability to fund a comfortable retirement.

A financial plan that includes setting money aside in a tax-advantaged retirement plan such as an IRA, 401(k), or 403(b) can be a vital tool for building financial security for the later years. Especially because LGBTQ+ persons may wish to retire to a locality that is more accepting of the individual’s lifestyle—which often means living in a larger metropolitan area—higher housing expenses and costs of living may be harder to avoid. This should also be taken into consideration in building a financial plan for retirement.

At The Planning Center, we understand that each client’s situation is unique. This is perhaps even more true for LGBTQ+ persons seeking to create sound financial strategies for the future. Our fiduciary standard of care means that the most important thing we do is listen to our clients in order to gain the fullest possible understanding of their situation, needs, resources, and goals. To learn more, please contact us for a no-obligation appointment.