Over the past 50 years, the LGBTQ+ rights movement has secured growing social acceptance and numerous legal protections. In 2015, the U.S. Supreme Court’s decision in Obergefell vs. Hodges guaranteed same-sex couples the right to marry, and a 2020 decision extended Title VII protections under the Civil Rights Act of 1964 to gay and transgender workers.
However, the past few years have also a seen a wave of anti-LGBTQ+ state legislation. For example, there were 43 bills to prevent transgender youth from receiving gender-affirming healthcare in 2021, according to the Human Rights Campaign. There has also been a trend toward religious exemptions to existing laws, allowing businesses to refuse to serve LGBTQ+ individuals—including in medical care.1
While there is plenty of cause for concern, there is also reason for celebration, including the 44 pro-equality laws passed in 2021 at a federal level, and the growing number of companies that offer healthcare coverage for gender-affirming care.
Overall, there are more opportunities for lesbian, gay, bisexual, transgender and/or queer (LGBTQ) people in the U.S. to experience financial freedom and accomplish their goals than there were even a decade ago.
Whether you’re planning to start or grow your family, budgeting for adoption or surgery, or saving for retirement, a financial plan can help you address those challenges and work toward realizing your goals.
Be sure that your financial plan evolves over time. Legal hurdles can change, and you should be prepared to take advantage of new opportunities—or address new challenges—as they arise. Here are some examples of how LGBTQ+ financial planning can help you achieve financial freedom and allow you to live life on your terms.
1. Financial planning can help you take advantage of the financial benefits of marriage.
Since Obergefell vs. Hodges, nearly 300,000 same-sex couples have tied the knot.2 When they do, these new families gain more than 1,000 federal benefits in everything from income taxes and Social Security to health insurance and estate taxes.
If you’re recently married, it’s a good time to build a financial plan together that takes these benefits into consideration.
2. Financial planning can give you financial freedom.
Financial independence, meaning you don’t rely on others for financial support, is an important milestone for LGBTQ+ individuals. According to a 2022 U.S. Bank survey, 59% of LGBTQ+ individuals became financially independent at age 18–24, compared with 52% of non-LGBTQ+ folks, often due to familial or community rejection and discrimination.3
A financial professional can give you strategies to achieve long-term financial stability so you can experience life in the way you want it.
3. Financial planning can help you establish emergency savings.
Even today, coming out to an employer or other employees can risk the livelihoods of LGBTQ+ workers. Almost half (45.5%) of LGBTQ+ workers said they have been treated unfairly at work, including being fired, not hired or harassed because of their sexual orientation or gender identity.4 In addition, a recent McKinsey report found that transgender employees were almost twice as likely as cisgender adults to be unemployed.5
An emergency fund is a good idea for anyone, but LGBTQ+ individuals may particularly benefit from having a safety net of at least six months’ living expenses, ideally nine or more.
4. Financial planning can help you fund your path to parenthood.
Today, LGBTQ+ and heterosexual adults are planning families at nearly the same rate. Almost half (48%) of LGBTQ+ people aged 18 to 35 said they were actively planning to grow their families, compared with 55% of their heterosexual peers.6
For LGBTQ families, this may involve adoption, foster care, reproductive technology or other paths to parenthood—many of which come with substantial costs. For example, adopting a child can cost $25,000 to $60,0007, and the price of in vitro fertilization may be as much as $30,000.8
Given these costs, solid financial planning for expanding your family is critical. Of U.S. Bank LGBTQ+ survey respondents who have expanded their families, 90% used credit cards and 37% used their 401(k) to meet the costs, harming their chances of future financial success.9
Read more about family planning for the LGBTQ+ community.
5. Financial planning can help make homebuying attainable.
Homeownership is the best way to build generational wealth. The U.S. Bank survey found that some segments of the LGBTQ+ population are more likely to own a home than the 64% of non-LGBTQ+ individuals who do: gay people (77%) and lesbians (65%). But other segments are less likely to own a home, including bisexual (61%), transgender (60%) and queer (55%) individuals.
The U.S. Bank survey also found that, despite having higher credit scores, 52% of LGBTQ+ respondents said they had a difficult time getting a mortgage, compared with 38% of non-LGBTQ+ people.
Finding the right mortgage lender and learning more about the homebuying process are two ways you can achieve your dream of homeownership.
6. Financial planning can help you navigate a gender transition
For individuals considering a gender transition, medical treatments come with high costs if your insurance doesn’t cover them. While the cost of gender-affirming surgery varies by type of treatment, they could run from roughly $3,000 to $25,000, according to the Philadelphia Center for Transgender Surgery.10 Despite that knowledge, 65% of transgender respondents to the U.S. Bank study said gender affirmation was a financial goal.
While 67% of Fortune 500 companies offer transgender-inclusive health insurance coverage in 2022 (up from 0 in 2002),11 this won’t be the experience at all companies. It’s a good idea to speak to a financial professional who can help you explore funding sources.
7. Financial planning can better prepare you for retirement.
LGBTQ+ are less likely to be prepared to retire than heterosexual people. In a 2018 Prudential survey, 55% of the LGBTQ+ community had nothing saved for retirement, compared with 42% of non-LGBTQ+ respondents.12
The U.S. Bank study found that LGBTQ+ workers were slightly less likely than non-LGBTQ+ workers to have an employer-based 401(k) (32% vs. 36%), but more likely to have an investment/retirement account not through their employer (24% vs. 18%).13
With LGBTQ+ individuals less likely to have children to care for them in their old age, and with a higher rate of poverty among this population, it’s even more important to start saving for retirement early.
Read more about retirement planning for LGBTQ+ individuals and families.
8. Financial planning can help ensure your loved ones are taken care of.
While the legality of same-sex marriage has put LGBTQ+ couples on more equal footing when it comes to preparing their estates, there are still some concerns for LGBTQ+ families, such as leaving assets to an unwed partner. An estate plan can smooth over these concerns and ensure loved ones are taken care of.
Read more about estate planning for the LGBTQ+ community.
Financial planning is a critical tool for anyone who wants to better manage their finances and plan for the future. For the LGBTQ+ community, financial planning is also a way to capitalize on long-awaited legal rights and strive toward the life you’ve envisioned for yourself.
These LGBTQ+ financial planning tips are a start, but also consider working with a financial professional who understands your dreams and your circumstances.