Here's What LGBTQ+ Individuals Need to Know About Retirement Planning

by Daniella Flores |June 14, 2023

Long-term budgeting is essential when it comes to retirement, but commonly gets pushed to the back burner for more immediate needs and goals; beyond that, LGBTQ+ individuals, partners and families, in particular, often face challenges that can affect their finances both before and during their golden years.

One reason? A wage gap among LGBTQ+ workers, who tend to earn significantly less than their cisgender, heterosexual counterparts — about 90 cents for every dollar, according to an analysis by the Human Rights Campaign Foundation. LGBTQ+ people of color, transgender individuals and non-binary folks earn even less, with transgender women earning just 60 cents for every dollar the typical worker earns.

And while the LGBTQ+ community has made equal rights progress, LGBTQ+ folks along with their partners and families may still struggle to find financial guidance that addresses their needs, whether it's how to handle housing discrimination when purchasing a home, credit problems following a name change, healthcare costs for gender-affirming surgeries or hormone therapy, or other issues.

An LGBTQ+ supportive financial planner can be a valuable resource, and to help even further, we've gathered saving and spending advice from top pros. These tips from LGBTQ+ educators and financial planners can help you tackle current concerns and plan for the retirement you envision.

Two retired men laugh together at a cafe

What does saving for retirement actually mean?

If your goal is to retire with some financial security, it entails not just saving money but also investing it to prepare for that future life stage.

You have options when it comes to investing for retirement. You could contribute money to a retirement plan sponsored by your employer, such as a 401(k) or 403(b) plans, or save by using an Individual Retirement Account (IRA) — or possibly do both if tax rules permit.

The upside of these accounts is that they offer tax advantages. Over time, as you continue to invest month over month, those investments can potentially compound and grow to become savings you can live off.

To determine what you'll need for retirement, it helps to use the 25x rule coined by William Bengen. The 25x rule gives you a baseline of what you should save by taking your annual living expenses and multiplying them by 25. This isn't an exact number to go by as your expenses may be greater or less depending on your life situation, but it's a solid starting point.

To take your estimate further, you can also try the compound calculator at It's a useful tool to help gauge how much you'll need to save and invest to reach your goal for retirement.

How to invest for retirement at various life stages

To start, you can try to visualize what you want for your future by asking yourself some questions. For example: At what age would you like to retire? Will you be single or with a partner? How much money will you need to support your lifestyle? These may seem like simple questions, but because many LGBTQ+ individuals, partners and families struggle to find financial guidance tailored specifically to this community and their experience, it's worth thinking them through.

Consider that the LGBTQ+ community hasn't always had the right to legal marriage and protection from workplace discrimination, both of which can inform personal and financial futures. The potential tax benefits of filing jointly when married (possibility of a lower tax bracket together or of greater charitable donation deductions) or healthcare advantages (say, if a company plan extends spousal health care) were only legally granted to same-sex couples nationwide in 2015. And it wasn't until 2020 that the Supreme Court ruled that firing someone for their sexual orientation or gender identity violates federal law.

Given this history, it's helpful to start exploring these factors because they'll help determine not only how much money you'll need when you retire, but also any tax advantages that can help offset that cost.

Keep in mind that you don't have to plan it all at once; instead, you can work from whatever life stage you're in. Read on for a breakdown of three key stages, with advice on putting some of your income toward savings at each.

Stage 1: The graduate

When you're leaving school and starting out on your career path, your needs might differ from your heterosexual counterparts. If you're looking to start a career in a location with a larger LGBTQ+ community, it can take some financial planning to relocate, for example. If you're trans, you may be considering a name change, hormone therapy or gender-affirming procedures that can entail legal and financial costs.

It's smart to become more intentional with your money at this stage, says Rita-Soledad Fernández Paulino, a financial educator for women, BIPOC and LGBTQ+ communities and founder of Wealth Para Todos LLC. Start a habit of creating a spending plan for each paycheck, she suggests. In addition, "make sure you are saving an emergency fund in a high-yield savings account and make a plan to eliminate your high-interest debt."

When evaluating a prospective employer, look beyond the paycheck, Fernández Paulino adds. On interviews, ask about health insurance benefits and employer retirement accounts, and once you have earned income, it's ideal to start investing in an employer-sponsored retirement plan like a 401(k) or an IRA.

These five steps can help set you up for saving and investing success:

1. Create an emergency fund of living expenses for one to three months to start, and build that up gradually to cover three to six months.

2. Don't wait to invest. Even if you're paying off student loans, you can still get started investing $15, $25 or $50 every month. The most important thing is to start this good habit early on in your career.

3. If you have any high-interest debt like credit card debt, prioritize paying that off first while setting aside a small amount for investing.

4. If your employer offers a 401(k) or 403(b) retirement plan and matches contributions, opt for at least the match and slowly raise that amount by 1% over time.

5. If you don't have access to a 401(k) or a 403(b), consider opening another tax-deferred or tax-free investing account like a Traditional or Roth IRA. Or, if you're self-employed, you can also invest using a Solo 401(k) or SEP IRA.

Stage 2: The builder

At this stage of your life you may have explored your career or could be pivoting into a new field of work. Perhaps you're buying a home, marrying a partner or starting a family. Retirement point is about 20 years in the future.

This is the stage where my wife and I are currently, and we still face discrimination, which can lead to setbacks in reaching our goals. We recently relocated and were in the process of buying a home together. One of the hardest lessons we learned was that finding the right broker for us was just as important as finding the right home.

We initially connected with a broker who assumed we were sisters — even after we introduced ourselves as a married couple — and was dismissive of us. This person was uncomfortable with our situation, so we decided not to work with them, and instead shopped around for a broker who was accepting of us and understood the vision we had for our new house. It was an unexpected delay, but it didn't deter us from our dream of buying a home.

A woman holds her pregnant partner's stomach.

Stage 3: The homestretch

In this later period, it's important to think about the rising costs of essentials like healthcare. (One aspect to consider is that, according to research from the Movement Advancement Project, currently only 15 states, the District of Columbia, and Puerto Rico prohibit private health insurance discrimination based on gender identity and sexual orientation.)

Another financial factor may be the cost of living if you want to move to an area with a larger LGBTQ+ presence and more protections for LGBTQ+ people; long-term care costs and the ways in which inflation might affect your savings as you age are things to take into account as well.

"If you plan to retire in the next 10 years," says Lauren Boland, creator of the retirement calculator cFIREsim, "you need to start thinking about problems that will arise immediately when you retire. Do you know where you'll live? Do you have a plan for healthcare? Are you under 59.5 years old and need to figure out how to withdraw money from pre-tax accounts like a 401(k) or IRA? All those questions have financial implications that you can plan for in advance." That's why it's important to keep a balanced view, she notes. "Keep your eye on the prize but keep re-evaluating these goals and questions."

— With additional reporting from Life and Money by Citi editors.

Daniella Flores

is a queer, non-binary, and Latine artist, software engineer and creator of the award-winning money and side hustle blog for creatives and LGBTQ+ folks, I Like to Dabble. Daniella's work has been featured on TIME, Investopedia, MSN, CNBC, LA Times and Business Insider.

The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees, and we do not guarantee the accuracy or completeness of the information presented in the article.

The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees, and we do not guarantee the accuracy or completeness of the information presented in the article.