Financial planning, investment decisions, salary, support, and all the money flows for people and their families in the United States must take planning for older adulthood into account. Retirement, aging, and end-of-life experience can be expensive, to say the least. Increased risks for isolation and heightened caregiving needs point to a more expensive aging process for LGBTQIA+ adults in the U.S.
Much of financial planning and consideration for retirement and older adulthood is universal. But each person’s experience will be different, and researchers find considerable variations along identity, economic, and geographic dimensions.
For LGBTQIA+ older adults, the range of experiences and needs can stand in stark contrast with their straight and cisgendered peers. Recently, UCLA’s Williams Institute took a look at the data from the U.S. Census Household Pulse Survey, analyzing the lives and realities of LGBT older adults. The insights they reported were striking, particularly when it came to the financial and isolation risks that were higher by far for the LGBT community.*
LGBT older adults in the U.S. are twice as likely to be single than straight/cisgender older adults. In fact, 25% of LGBT people over 65 years old live alone – far more than the 10% of their straight/cisgender peers who live alone at that age. Living alone can be isolating for anyone, but in older age, the expenses and risks inherent to living alone increase.
Compounding this isolation risk is the fact that LGBTQ older adults are three to four times less likely to have children than straight/cisgender older adults. This, coupled with the heightened probability of familial alienation of LGBT family members, means a greater likelihood that the caregiving and financial safety net provided by adult children and extended family is more likely to be absent for LGBT elders in the U.S.
In fact, a study by Croghan et al found that fewer than one third of LGBT older adults were able to rely on their family of origin for their own care and health needs, despite the majority of LGBT older adults reporting that they performed caregiving functions for their own parents. Caregiving is, of course, eventually a necessity for nearly everyone, and a person’s inability to receive caregiving support from their family poses not only a risk, but a potentially large financial burden.
Planning for retirement for LGBTQIA+ older adults is a different process than for other communities, particularly since these older adults are more likely to be single, live alone, and have no children or family they can rely on for caregiving as they age. A 2022 survey further underlines the importance of focusing on the LGBTQIA+ community when it comes to older age. The study found that LGBTQ Americans are less confident that they will have enough so that they can live comfortably in retirement than straight and cisgender Americans. Even when narrowed to upper-income respondents, 89% of non-LGBTQ Americans reported confidence in their retirement savings while only 76% of LGBTQ respondents felt the same.
Based on what we’ve learned, it seems that LGBTQIA+ aging and retirement planning has a likelihood of being more expensive than it might be for our straight and cisgender peers. Knowing that LGBTQIA+ community members, even at the higher income levels, don’t feel confident that they’ve made sufficient provisions for themselves in retirement is yet another sign that this is an area that requires attention.
The demographics of the LGBTQIA+ community are changing along with the generations and decades. We can hope that isolation in older age will be less of a risk factor as Generation X and its successors approach older adulthood. For today, however, we are well-advised to heed the experience of our elders and plan for what very well could be a pricier retirement.
* A note to our readers: many studies across the LGBTQIA+ field report on subsets of the community based on the data sets available. For this reason, you will see references throughout this piece that range from LGBTQIA+ to LGBT to LGBTQ.
Megan Kashner is Co-founder of Colorful Capital and a professor and Director of Social Impact and Sustainability at Northwestern University’s Kellogg School of Management. William Burckart is Co-founder of Colorful Capital and CEO of The Investment Integration Project, an applied research and consulting services firm that helps investors manage systemic societal and environmental risks.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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