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Financial, Retirement Planning

by Allison Ferrara

Too Easy To Put Off?

One of the most easily put off pursuits is detailed financial and retirement planning. Yet good financial and retirement planning is absolutely critical to your security in the future, perhaps more so for gay men and lesbians.

It's best to start with the basics. For lesbians and gay men, unfortunately these basics aren't always so basic.

While the same financial goals usually apply - a secure retirement, saving for a new house, planning to start a business - the strategies used to pursue them can be quite different. Several factors combine to make financial planning a unique challenge for members of the gay and lesbian community.

There's the lack of access to marriage for gay couples, of course, but more subtle elements can come into play. Sometimes members of the gay and lesbian community approach financial planning differently, often either with suspicion or indifference. Also, though the situation is improving all the time, not all financial service providers recognize the challenges their lesbian and gay customers face.

Regardless of the reasons, financial planning requires a different style for gay men and lesbians.

Themes to Keep in Mind

So, if financial planning is one of your resolutions for changing your life for the better, there are a few high-level themes to keep in mind.

• Social Security

First, if you're in a relationship, remember that you can't take anything for granted. If you're engaged in retirement planning, your partner can't rely on your Social Security benefits. Some benefits from your employer's retirement plan may be unavailable to your partner. Other benefits require careful planning to maximize withdrawals and avoid potential tax traps.

• Wills, Powers of Attorney

It's also important to be sure that you've designated your partner as a beneficiary on your retirement plans.

If your planning includes estate planning, the pitfalls are numerous. In addition to wills to be sure your property goes to your partner as you intend, you'll need to think about powers of attorney to be sure your partner can make decisions when you can't. You'll want a priority of visitation to ensure he or she has access to you when you're incapacitated.

In some jurisdictions, you'll have to plan harder to avoid estate taxes, because the estate tax marital deduction is usually unavailable to you.

• Insurances

If buying or revising insurance is part of your fall planning makeover, be sure your policies offer the protection you think they do.

Auto and homeowners insurance doesn't always provide the coverage gay couples need - especially if only one partner's name is on the deed or car title. In the life insurance arena, be sure the right partner owns the insurance, and that the policy is purchased from a firm that recognizes a gay partner's "insurable interest" in the life of the other.

[Ed: If your wealth generation plan includes negative gearing or high debt, consider taking out term life insurance where the sum insured may be varied annually, so that your Estate is debt free should you suffer an untimely demise. Trauma or diability cover may also be prudent. Make certain that the insured events covered meet with your requirements.]

• Financial Planners

Second, be mindful of your own attitudes toward financial planning. Yes, historically the process has not been very gay-friendly. However, all that is changing.

Progressive financial institutions are recognizing the different needs of their lesbian and gay customers, and designing products and services to meet those needs. Moreover, larger social forces are shifting the responsibility for financial planning to the individual - from retirement plans to health insurance to estate taxes, the social compact is being changed.

These changes apply equally to gay people. So it's up to you to plan for a secure retirement, to be sure your income stream is protected in the event of disability, or to manage your investment portfolio. While you can't do all these things alone, you also can't assume someone else is doing them for you, either.

Finally, now that you know that the rules can be different, make sure you have a qualified financial advisor who does, as well. It's clear that there are a lot of details to consider when financial planning involves gay and lesbian clients, so it's essential that you find an advisor who is knowledgeable about how the process may differ.

It's also important that your advisor work with financial services companies that are sensitive to the needs of the gay community, and whose products reflect that sensitivity. After all, the right financial advisor can help you make your resolution an easier one to keep!

(Nashville City Paper 16 April 2003 - Allison Ferrara
by way of Newsclippings World-Wide GLBT- Graham Underhill)