Financial stability is impacted by many factors, including how good people are at saving, how bad they are at spending, how much money they make and the type of education they receive on managing money. Add another factor to this list: social progress. Take, for example, the LGBT community.
LGBT people have historically been the segment of the U.S. population most likely to retire in poverty, according to Catherine Collinson, CEO and president of nonprofit Transamerica Institute and its Center for Retirement Studies. But that trend is improving.
For context, homosexuality wasn’t legal in all 50 states until 2003 with the Lawrence v. Texas decision. And it wasn’t until 2015 that same-sex marriage became a legal reality nationwide. In short, although there is still progress to be made, major strides have occurred in the LGBT community in the 2000s.
The Aegon Center for Longevity and Retirement, the Instituto de Longevidade Mongeral Aegon and TCRS explored the connection between retirement and social progress in the study “LGBT: Retirement Preparations Amid Social Progress,” which surveyed 900 LGBT workers and retirees from nine countries and 8,474 heterosexual workers and retirees in those countries. Collinson spoke to me about the major takeaways of the study for employers.
There are noteworthy trends among younger employees versus older ones, said Collinson.
“The LGBT population tends to be young,” she said. “We see a higher percentage of millennials self-identifying as LGBT compared to Gen X or boomers. That I attribute to social progress.”
Younger LBGT workers not only have larger numbers, but they’ve had access to certain benefits. They save more by getting tax advantages to being able to file jointly, and they can take advantage of spousal coverage in health care or retirement benefits, for example.
This can have a tremendous impact on a person’s career and their savings. Collinson was pleasantly surprised to discover “how inclusivity and extending eligibility of employer benefits, specifically 401(k) plans, have the potential to rapidly improve an employee’s retirement outlook compared to previous generations,” she said.
“Older generations have less time to enjoy those benefits. And for generations that are already retired, they haven’t gotten the benefit and are more likely to be financially struggling in their retirement,” said Collinson. “We can’t overlook the decades, perhaps centuries, of employment discrimination.”
With the proliferation of 401(k) plans, she added, each new generation of the workforce is starting to save at a younger age than the generation before. Looking way back, many LGBT workers were well into their career before 401(k)s were even created.
Considering this along with how a more inclusive social environment eases retirement readiness, and you find that younger LGBT entering the workforce are saving for retirement like their straight counterparts.
“The takeaway for employers is that LBGT workers are becoming more prevalent in the overall workforce, especially among younger generations,” she said. “It’s noteworthy for employers to consider that in their recruiting efforts, in how they cultivate their corporate culture and in employer benefit design.”
I appreciated several aspects of my conversation with Collinson. She acknowledged that just because a society rights a wrong, it doesn’t mean that all the past wrongs have been eliminated. Just because gay marriage became legal doesn’t mean that older generations of LGBT employees are on the exact same page as their straight counterparts with finances or retirement readiness. There’s still an amount of catching up to do.
Which brings me to my next point: transgender employees. From what I’ve seen and read (and correct me if I’m wrong), social progress for this part of the LGBT community has been slower than for the rest. While gay people have had major legislative wins in 2003 and 2015, has there been an equivalent for transgender people yet?
Collinson talked about transgender employees and retirement readiness. This survey itself had a small sample size of transgender people, so it’s difficult to gauge what their experience has been and how it has impacted their employment and retirement, she said. A small percentage of the population identifies as transgender, also making this hard to study.
I’m curious, just like younger generations are more likely to identify as gay or bi than in previous generations, will more people be open about identifying as trans in future generations than they are now? How will that impact quality of life and retirement readiness for future transgender employees?
Andie Burjek is a Workforce associate editor. Comment below or email firstname.lastname@example.org.