Canadian members of the lesbian, gay, bisexual and transgender (LGBT) community must seek out professional financial advice around their unique financial and retirement planning issues including estate planning, care-giving and housing. The advisor community, on the other hand, must respond to the financial planning needs of this often marginalized segment of society.
These are some of the key takeaways of a recent panel discussion hosted by BMO to put a spotlight on the LGBT community. Organized to coincide with Toronto’s Pride Week, the discussion addressed unique financial challenges facing the LGBT community and offered some solutions.
“If you look at the estate planning, there are issues that the LGBT community faces; [particularly the baby boomers] who are moving into their senior years,” said Dr. Amy D’Aprix, BMO life transition expert. “When boomers came out being gay, it was less socially acceptable and because of that we have a population right now entering aging years who may be estranged from families.
“In addition, they may not have an extended family or children, as a result there’s a real need to address estate planning in a different way than we typically think about with the general population.”
The planning around an estate is more crucial for this population, while care-giving is another significant issue for the LGBT community, she added.
“Obviously, many folks have partners who they can rely on in old age for care, but [some] folks don’t have that [and] the lack of children in the community and the potential of estranged family relationships means that this community needs to give a lot more focus to who is going to care for [them] as [they] age,” she said.
Looking for alternative housing is particularly challenging for this community where a clash of pride and prejudice can complicate matters. “Many folks find that there isn’t a comfortable place to live in retirement that supports the fact that they are gay and that they can live there comfortably,” said D’Aprix.
Whether gay or straight, many single people rely upon government-assisted housing support but “if you look at housing and what’s available for the LGBT community, there are very few options in residential communities,” she said. “One of the things that has to be looked at is the additional cost for maintaining homecare or other housing issues.”
D’Aprix stressed that from a financial and social standpoint, all these issues need to be addressed pre-retirement. “Building enough social support to take care of the care-giving issues is key,” she said. “It can add as much as $50,000 in annual cost to retirement plans when you start looking at the different types of care-giving and housing options that many folks in the LGBT community will choose and be most comfortable with in retirement.”
By thinking ahead of time members of the community can ensure they are prepared and have desired options available to them.
Apart from these unique issues, the LGBT community faces all the usual challenges of retirement planning. D’Aprix advises members of this community to take a holistic approach to financial planning and seek out a professional financial planner.
They must sit down with an expert and “go through from estate planning and care-giving to housing and look at the cost and do a good financial inventory of where they are now and make a financial plan to make sure they get there.”
That, she said, is the most “logical” and the “best solution”, yet not enough people do it.
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