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Retirement Planning for Gay and Lesbian Couples

With the recent overturning of California's Proposition 8 -- which had outlawed gay marriage -- and subsequent appeals in California, gay marriage and gay couples have been on our radar lately. As a retirement planning expert, what concerns me is whether there are special retirement planning considerations gay couples may need to take into account. And there most definitely are.

First, let's review what lesbian and gay couples have in common with everybody:

  • You need to make your money last for life, no matter how long you live and no matter what happens with the economy. The first step is to estimate how long you might live, considering your lifestyle and family history. Two great websites that can help you do this are and
  • One of you will die first, so both of you need to plan for that eventuality, so that the survivor has adequate financial resources.
But what are the special considerations that gay couples need to take into account? There are many details that you'll need to pay attention to -- in particular, benefits that often occur automatically for married straight couples. The specific rules regarding gay marriage and other partnership arrangements are different from state to state, and from employer to employer.
  • If you have a pension plan at work, you'll need to investigate if and how you can name your partner as a beneficiary. Some employers recognize gay marriage or other partnership arrangements, and some do not. It's not possible to make generalizations -- you'll just need to do your own homework.
  • Make sure that all of your retirement and benefit programs -- pension, 401(k), IRAs, life insurance -- name your partner as your beneficiary. The same goes with buying an immediate lifetime annuity. Most insurance companies will let you name any beneficiary for a joint and survivor annuity, but you'll need to check the specific details.
  • If you want to leave your estate to your partner, you'll need to be very specific about it in your will or trust. Actions that automatically occur regarding the estates of married straight couples may not happen automatically for you.
  • Unfortunately, Social Security does not recognize gay marriage (see footnote 1), as was verified by a phone representative at Social Security who talked with my research associate. With a gay couple, the Social Security income that your household receives is the sum of each of your Social Security benefits, based on your own earnings record. When one of you dies, that person's Social Security income stops. This is different from married straight couples, for whom survivors' benefits are paid to the spouse.
  • If you want to buy long-term care insurance as a couple, you'll need to ask the insurance company about their specific requirements for recognizing your partnership.
  • If you want your partner to be able to visit you when you're in the hospital and have access to your medical information, you may want to obtain a HIPPAA (Health Insurance Portability and Accountability Act) release and keep it in your car. You may also want to obtain a medical power of attorney if you want your partner to make medical choices if you're unable to, or a durable power of attorney if you want your partner to make financial decisions on your behalf. Here's an excellent article from the Tucson Weekly written by an attorney that summarizes many of these issues; even though it's written for Arizona, most of the concepts are appropriate across the country.
  • In your later years, you may need a younger advocate to help with household matters such as paying bills, dealing with insurance, monitoring medical care, and arranging for long-term care. With married straight couples, this is often one or more of their children. While gay couples may have children of their own, if you don't, you'll need to be deliberate about building a social network that can provide this simple yet essential support.
It's important to note that the retirement planning considerations for unmarried straight couples and gay couples are very similar. Like all aspects of retirement planning, you'll need to pay attention to the details that are specific to your situation. And a modest amount of retirement planning can go a long way to providing the financial support you need, so that you can simply focus on enjoying your life.

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