Money issues are all too common for everyone. However, the LGBTQ+ community face some unique financial struggles. Did you know that 22% of the LGBTQ population makes less than $12,000 annually than their heterosexual counterparts? And that LGBTQ+ people are 73% more likely to be denied a loan from a financial lender?
Unfortunately these larger problems often stem from bias, along with systematic problems within the legal, financial and medical systems. “The financial hurdles or obstacles that exist for LGBTQ+ are largely because the systems, laws, and rules in place have not contemplated the unique circumstances that LGBTQ+ folks face. As a result, they’ve largely either been ignored or more recently come under attack again,” says Jim Marracco, CFA, CFP of Thinking Big Financially, Inc.
To get clarity surrounding these important issues and a checklist for what to do, we spoke to several LGBTQ+ financial experts about what individuals in this community can do to educate and financially empower themselves. Here’s what they had to say.
Trust In Your Corner
“Financial planning for people in the queer community may or may not be unique,” says Mindy Neira, CFP, ChSNC and Principal & Wealth Manager at Modera Wealth Management. (After all, most of life’s financial building blocks: saving money, budgeting, investing, etc., are universal.) “But finding a queer financial planner who can be your ally and walk you through your own unique challenges can make all the difference in ensuring you have a solid financial plan today, and over time,” she says.
Neira also notes the importance of doing research on the financial advisors you’re looking to work with, before you sign on the dotted line. You want the relationship to be a trusted one that can last for years to come, so don’t be afraid to do interviews before you agree to work with someone. “It’s important that your financial planner understands the nuances of your life and finances so they can best help you make decisions over time,” Neira says. Having someone who truly understands the needs of the community can help you become more aware of (and ready for) unique needs of the LBGTQ+ community, who tend to have higher expenses over the course of their lifetime.
Saving For Those Big Expenses
As a member of the LGBTQ+ community, there are a complex set of things to consider with regard to having a child, from conception to college. Some options for having a child, including adoption, surrogacy, and fertility treatments can become incredibly costly. For example, the average cost of surrogacy in the United States ranges from $90,000 to $130,000. The average cost of IVF, meanwhile is around $12,00 per round, and many women require multiple rounds in order to conceive.
Although there’s unfortunately no way to defray these costs, experts recommend saving for this expense in the same manner that you would any other big life goal. You may want to set aside money in a dedicated savings account for these expenses, and possibly invest the money depending on the time horizon for your goal. For example, if you’d like to start a family in another 5-10 years, then you may want to consider putting that money to work for you in the stock market. If, however, you’re looking at a short-term goal for the next 3-5 years, then take a look at setting the money aside in a HYSA, or high yield savings account. Look at online banks rather than brick and mortar, since they typically have a better rate. (Right now you can stand to earn a little less than 1% APY, but Bankrate keeps a running list of the best savings account rates that’s updated weekly.)
Having access to good health care and insurance is paramount for everyone, but the truth is that there are often unique health situations that members of the LGBTQ+ may encounter, and these won’t always be covered by insurance. Some of these include gender-affirming surgery and hormone therapy. Bottom surgeries can cost about $25,000, and top surgeries are in the $10,000 range. Facial and body contouring, like chin implants or laser hair removal are also costly, and can run into the thousands depending on what you want done. Thankfully, more employer insurance policies (and all those sold under the Affordable Care Act) now cover at least some gender reassignment surgeries, but even if you’re covered, there are still many out-of-pocket costs associated. For example, the typical cost of hormone replacement therapy is between $30 to $90 per month.
According to the Movement Advancement Project, 42% of the LGBTQ population lives in states with insurance protections that include sexual orientation and gender identity. This means that almost half of people within the LGBTQ+ in the US do not live in a place where there are insurance protections in play.
“Insurance can be particularly unfair, with those in the gender-affirming surgeries and hormone treatments not being fully covered or HIV positive folks not being able to purchase the types of protective insurance products (life, long term disability) that others are able to access. And then there is of course the backdrop of how being LGBTQ+ has impacted each person financially. Perhaps it has hindered their career or earning ability. Or forced them to move to an urban area, which could be more costly. Or it has left them without family support for things like paying for college, leaving them with more debt,” says Marracco.
If you have insurance, a quick call (hopefully quick!) will tell you if they cover the procedures or medication you may need. Just make sure they send you a detailed list of coverage via email or snail mail after your call. If you aren’t covered, then it’s time to put your savings plan to work, as outlined in the section above. (Money for short-term financial goals should go into a HYSA, money for longer-term goals can go into the market.) Other members of the LGBTQ+ community have also had success over the years crowdfunding sources of income for surgeries and HRT, and don’t dismiss the idea of finding a new job with better healthcare coverage that can help you live the life you’ve imagined, while being able to save more of your hard-earned money. There are always options.
If You’ve Faced Discrimination, Speak Up!
If you feel that you’ve been financially discriminated against, it’s time to speak up. Your sexual orientation is a protected class, meaning that no person or institution is allowed to deny you a benefit, rate, job — or anything else — that a cis hetero person may receive. If you’re making big financial moves, or just looking to educate yourself on options for the future, it may be time to seek guidance from a professional. They can help you understand your rights in every situation, and access the resources you need. Neira recommends The LGBTQ+ Bar, which is a great place to find lawyers and other resources, and our list, LGBTQ+ Resources for All: Help, Support, Info and Allyship can also get you where you need to go.
MORE ON HERMONEY:
- By the Numbers: Being LGBTQ+ In America,
- The Higher Lifetime Costs of the Queer Community
- LISTEN: HerMoney Podcast: LGBTQ Money Matters
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