Under-the-Radar Financial Challenges LGBTQ+ People Face

  • The LGBTQ+ community has unique financial needs that traditional financial services don’t meet.
  • Traditional banks require transgender people to jump through hoops to get their correct name on their accounts.
  • Companies like Daylight and personal finance app SageCENTS are using technology to try to solve these problems.

Queer and transgender people face unique challenges when it comes to managing their money.

According to the Center for LGBTQ Economic Research, LGBTQ consumers are 7% less likely to have a savings account than the general population. Additionally, a survey of LGBTQ retiree confidence shows that 63% of middle-income LGBTQ Americans say their debt affects their ability to save for retirement, compared to 43% of non-LGBTQ Americans.

However, technology is catching up with these issues, and services are emerging to meet the particular financial needs of LGBTQ Americans.

Rob Curtis, co-founder of LGBTQ-Specialized


Daylight, says, “There’s this feeling that our heterosexual cis brothers and sisters are beginning to anticipate big life events, while we”—Curtis is also gay—”are still stuck in our teenage years. We’re actually spending our 20 years exploring our identities.” While non-LGBTQ people can save for a home or start a family at this age, gay and trans folks typically spend more money on experiences, community building and mental health resources, Curtis says.

Additionally, many LGBTQ seniors struggle to retire comfortably. David Vincent, Chief Program Officer at SAGE Advocacy and Services for LGBTQ Elders, said: “LGBTQ seniors have experienced horrendous discrimination. The older you get, or if you identify as a person of color, or a trans person or non-binary, it gets even harder.If you were fired or underemployed because of discrimination, you don’t receive what you might have been entitled to on Social Security income.

Here are four specific financial barriers facing the LGBTQ community and how advancements in fintech aim to address them.

1. Use a gender-affirming name on bank accounts

Many transgender people choose to legally change their name and gender marker during their transition. Once their legal name change is finalized, trans people can use a traditional bank’s process to change their name on their bank accounts, debit cards, and credit cards.

However, this process can take months, depending on how long it takes local courts to approve gender-affirming name change documents, not to mention waiting for a new driver’s license and card. of social security. Additionally, some trans people might not be able to afford the court fees — around $750 on average — needed to change their legal name in the first place.

To address this, Curtis says, “Daylight offers a card with your name on it, regardless of what your legal ID says. It’s often a first empowering moment for queer folxes.”

2. Save thousands of dollars for gender-affirming care

A 2021 study led by Michael Zaliznyak at Cedars-Sinai Medical Center shows that only 34 state Medicaid policies cover gender-affirming hormone therapy (including Washington, D.C.), while only 25 Medicaid policies cover gender-affirming surgeries .

Another study, led by Anthony N. Almazan of Harvard Medical School and the Fenway Institute, shows that gender-affirming surgeries are associated with better mental health outcomes for trans people, including a reduction of 44 % of suicidal thoughts from one year to another.

This means that many transgender and non-binary folx are expected to save and raise money for hormones and life-saving surgeries on their own. The surgeries cost between $10,900 and $70,100, as Insider reported in 2019.

To make saving easier, Daylight has features that allow users to divide their savings into different categories. Curtis adds, “We have Ray, a non-binary virtual assistant built by non-binary folxes on our team, who walks people through the process. We discovered that the first problem was the complexity of financial planning for gender-affirming care. Rather than just setting a random savings goal, you have the option of using benchmarks for facial feminization surgery, electrolysis, top or bottom surgery.”

3. Build retirement savings

“Discrimination and underemployment have had devastating effects on our community,” says Vincent. “We don’t have savings, retirement accounts, and pensions. We’re four times less likely to have children and grow old alone. There’s no safety net for LGBTQ seniors. We are statistically disadvantaged.”

Designed specifically for queer and trans seniors, SageCENTS is a feature of the SAGE website that helps seniors plan for their retirement. The platform uses simple chat functionality with automated responses, designed to make it easy for seniors to navigate the platform. Each time you answer a question related to retirement, you get 10 points out of 100.

4. Complete end-of-life documents, such as an estate plan

End-of-life documents, such as an estate plan, will, or trust, can help your family members or the state distribute the money or property you own when you die. A health care directive ensures that you choose the person you trust most with your health care decisions if you become disabled.

Without proper end-of-life documentation, LGBTQ+ seniors could be forced to hand over their health care to a blood relative or the state, if there are no living relatives, by default.

Ryan Klippel, LGBTQ specialist financial planner at Optas Capital, says: “Let’s say, for example, if you’re an LGBTQ+ couple and you have a husband, girlfriend or domestic partner that you would prefer to make those decisions, but you’ am not legally married to them.You must identify them on your medical directive so that you can prioritize who you trust to make these decisions.

SageCENTS makes it easy for LGBTQ seniors to prepare these materials using their resource portal. The online platform educates LGBTQ seniors on the documents to prepare in order to create their end-of-life plan.

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