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Financial literacy is critical to achieving economic empowerment and financial well-being. Unfortunately, many Americans, including many LGBTQ+ Americans, lack an understanding of basic financial concepts.1 This makes it difficult to build a solid foundation that allows you to prosper.

Recent surveys of LGBTQ+ Americans found that:

  • 61% of respondents live paycheck to paycheck.2
  • 39% feel the quality of their financial life is worse than they expected.3
  • 72% have a high amount of financial stress on a daily or weekly basis.4

Why should employers care about this?

Employers play a pivotal role in fostering an inclusive, supportive workplace environment that can meaningfully impact the financial literacy and well-being of LGBTQ+ employees—and provide a boost to your bottom line.

Consider this:

  • In a joint study5 by the TIAA Institute and the Global Financial Literacy Excellence Center, employees spent an average of eight hours a week dealing with financial issues—about half of that time while on the clock.
  • While 77% of respondents in a separate survey6 rank financial wellness programs high among desired employer-sponsored benefits, only 28% of companies offer them—something the Harvard Business Review7 calls a “huge missed opportunity.”
  • According to Forbes,8 employer-sponsored financial wellness programs help alleviate financial stress, reduce distractions, increase performance, and improve job satisfaction and retention.

Here are 3 critical insights employers should know and key steps they can take to improve the financial well-being of their organization and their LGBTQ+ employees.

1. Understand the unique challenges specific to the LGBTQ+ community, and ensure inclusive benefit offerings to promote employees’ financial well-being.

What to Know

  • LGBTQ+ people—especially LGBTQ+ people of color, who experience the intersectional impact of racial and financial bias—face obstacles,9 financial bias,10 and discrimination11 that complicate managing personal finances12 in ways that cisgender and heterosexual consumers don’t. 2023 set a record for anti-LGBTQ+ legislation, which 2024 is well on pace to surpass with more than 480 pieces of anti-LGBTQ+ legislation as of the publishing of this article13
  • Out & Equal’s 2024 report, Talent on the Move—Where Do We Go From Here? found that 45% of survey respondents feel less safe in their state of residence due to changes in LGBTQ+ rights. The report also revealed that nearly 4 out of 5 (79%) respondents believe that anti-LGBTQ+ laws affect whether they would relocate for a new job and nearly 3 in 4 (72%) feel that their companies did not respond sufficiently to such legislation, indicating an emergence of distrust and a gap between corporate policy and the expectations or needs of LGBTQ+ and allied employees.14
  • LGBTQ+ employees report significantly lower annual household income15 than the general population, and nearly one-third of transgender Americans live in poverty.16
  • Medical debt is a leading cause of bankruptcy17 in the United States: 35% of LGBTQ+ Americans who have employer-sponsored health insurance aren’t able to cover their partner.18
  • One-size-fits-all benefit packages19 are fast becoming a thing of the past. Your employees, including your LGBTQ+ employees, are not a monolith, and they will be best served by flexible, self-directed benefit offerings,20 including financial wellness programming.

What to Do

Healthcare & Family Planning Costs

Gender-affirming care: $100,000+21
Adoption: $20,000 (domestic) to $70,000 (international)22
In vitro fertilization: $20,000 (initial cycle) plus $4,000-7,000 per additional cycle23
Surrogacy: $60,000 (traditional) to $225,000 (gestational)24

2. Be strategic, and think holistically when adding financial wellness programming to your employer-sponsored benefits offering.

What to Know

  • Implementing financial wellness benefits should be done in the context of a broader, inclusive, employer-sponsored benefit offering25 and requires senior leader buy-in, appropriate lead-time for planning, dedicated resources, effective communication, and iteration.
  • One-off financial solutions and blanket policies are ineffective and not what your employees need. Financial wellness benefits are best provided as part of a “personal finance ecosystem”26 that considers the unique lifestyle factors and lived experiences that influence and shape individual employees.
  • Effective financial well-being programs include benefits like financial coaching, comprehensive financial education resources, digital tools, and access to financial planning programs that guide employees through the four stages of financial wellness:27 gaining control over day-to-day finances, preparing for the unexpected, getting on track to meet financial goals, and attaining financial freedom.28

What to Do

  • Use the Consumer Finance Protection Bureau’s (CFPB) financial well-being scale to assess your workforce needs. Survey employees to ask them what their financial concerns are, whether and how the existing employer-sponsored benefits are meeting their needs, what types of financial wellness offerings they think would be most useful and would like to see added, and what their hoped-for outcomes are. Be sure the survey uses inclusive language that reflects the diversity of your employee base and use a mix of quantitative (e.g., multiple choice, ranking choices) and qualitative (open-ended subjective) questions.
  • Leverage free, objective resources—meaning resources that are not associated or offered by a third party with a vested financial interest of its own—on how to implement a successful employee financial wellness program like this webinar by the Consumer Finance Protection Bureau. When you are ready to engage with financial wellness service providers, it is essential that you hire unbiased LGBTQ+ inclusive providers like Financial Finesse and others who are well-versed in the LGBTQ+ community’s most pressing financial needs.
  • Based on the workforce survey results and available resources, plus the goals of your employees and organization, determine what individual elements will be included in your financial wellness program, how employees will access these offerings, and how you will measure success. Develop and implement a communication strategy to ensure employees are aware of and engage with your organization’s financial wellness benefits, including targeted communication to specific employee subgroups such as LGBTQ+ employees. Develop iterative mechanisms such as employee satisfaction surveys at regular intervals so you can fine-tune your employee financial wellness program over time.

3. Incorporate SECURE Act 2.0 features into your financial wellness benefit to address your LGBTQ+ employees’ most pressing concerns.

What to Know

  • Only 44% of Americans could pay for a $1,000 unexpected expense,29 and 61% of those surveyed consider employer-sponsored emergency funds30 among the most important employer-sponsored financial wellness benefits.
  • 28% of LGBTQ+ workers don’t have access to an employer-sponsored retirement savings plan,31 and more than half of middle-income LGBTQ+ employees are worried they won’t have enough savings to retire32 compared to 29% of their non-LGBTQ+ peers.33
  • 2.9 million LGBTQ+ adults 40 and younger have more than $93.2 billion in federal student loan debt, more than their heterosexual and cisgender counterparts.34 This significant student loan debt impacts other financial decisions and opportunities for LGBTQ+ individuals like purchasing a home or a car. It’s no surprise that 45% of employees surveyed35 consider employer-sponsored student loan repayment assistance the single most important financial wellness benefit.

What to Do

  • Implement the Setting Every Community Up for Retirement Act 2.0 (SECURE 2.0) feature that allows employees earning less than $150,000 annually to take self-certified emergency 401(k)36 withdrawals as often as once each month up to a maximum of $2,500 penalty-free.
  • If you weren’t already required to automatically enroll employees in your company’s 401(k), 403(b), or other savings plan, and you have more than 10 employees, start automatically enrolling employees as required by SECURE 2.0 to help them better prepare for retirement. Employees retain the right to opt out. Also, expand employee participation in your organization’s retirement savings plan by allowing your qualified long-term, part-time employees who previously were not allowed to participate in the plan.
  • Some employees will opt out of your organization’s retirement plan because they are repaying student loans and can’t afford to participate. Incorporate provisions in SECURE 2.0 Section 110, which allows employers to make matching retirement plan contributions for self-certified qualified employee student loan payments up to the plan’s available matching contribution limit. Aside from promoting your employees’ financial well-being, student loan matching contributions are an excellent recruiting tool that is becoming more widespread.

By offering targeted initiatives and resources, employers can help bridge the financial equity gap and empower their LGBTQ+ workforce to achieve financial well-being. Providing access to financial education, debt management, and coaching and planning programs alongside traditional benefits like retirement savings plans tailored to the unique challenges faced by LGBTQ+ individuals benefits employees and employers alike, contributing to a more inclusive, equitable, and supportive workplace culture.

In addition to providing inclusive financial wellness benefits, another important way employers can support their LGBTQ+ employees’ financial well-being and empowerment is through public advocacy. Due to inconsistent federal-level protections, LGBTQ+ people are increasingly vulnerable to the vagaries of state-level legislation. According to Out & Equal’s recently released report Talent on the Move—Where Do We Go From Here?, many LGBTQ+ people feel less safe in their home state, are considering relocating as a result, and would be reluctant to apply for jobs in states with anti-LGBTQ+ legislation.

Join the conversation and use your corporate voice to support LGBTQ+ rights. Your employees—current and future—expect it, and your public support will foster goodwill among consumers for years to come.


Read more from our financial capability and empowerment series:

4 Things LGBTQ+ People Should Know and Do to Improve Their Financial Well-Being
From Knowledge to Action: How the Financial Services Sector Can Better Serve the LGBTQ+ Community

The Equality Act Fast Facts

What Is the Equality Act?
The Equality Act is a U.S. Congressional bill that aims to expand LGBTQ+ protection from discrimination on the basis of sexual orientation or gender identity by strengthening existing antidiscrimination laws in key areas, notably consumer lending, which the Equal Credit Opportunity Act (ECOA) does not currently provide.

Why Does the Equality Act Matter?
Today, for instance, if an LGBTQ+ couple applies for a mortgage or a transgender person applies for an auto loan, even if an applicant otherwise qualifies, a lender can deny the loan based solely on the applicants’ actual or perceived sexual orientation or gender identity. If passed, the Equality Act would make this illegal by adding sexual orientation and gender identity to the list of protected statuses (e.g., race, color, religion, national origin, marital status, age) included under the ECOA.

What’s the Status of the Equality Act Today?
The Equality Act, originally introduced to Congress in 2015, has been evolving in the years since, and different iterations have been introduced to subsequent Congresses for consideration. The most recent version, House Resolution 15 (H.R. 15), was introduced in June 2023. Most bills undergo debate in committee before being brought up for vote. As of this writing, H.R. 15 remains in committee. According to the nonpartisan Public Religion Research Institute (PRRI), more than 70% of Americans support the passage of a bill like the Equality Act. The Equality Act has also been endorsed by more than 550 major businesses through the Business Coalition for the Equality Act.

What Do I Do If I Feel I’ve Been Discriminated Against by a Financial Institution?
In 2021, the Federal Reserve’s Consumer Financial Protection Bureau (CFPB) issued temporary guidance to the financial services industry that it will not tolerate discrimination on the basis of sexual orientation or gender identity. Whether applying for a credit card or loan (e.g., home, auto, student) or trying to open a checking or savings account, LGBTQ+ people who feel a financial institution has discriminated against them can submit a complaint to the CFPB or their state’s consumer protection office.

For more information, see What You Need to Know About the Equality Act.

Sources

  1. “A Hand Up Or A Handout? Tackling America’s Financial Literacy Crisis,” Forbes, February 3, 2022. ↩︎
  2. “Nearly 1 in 3 LGBTQIA+ Respondents Say They’ve Experienced Discrimination, Bias in Financial Services,” National Endowment for Financial Services, June 24, 2022. ↩︎
  3. Ibid. ↩︎
  4. The State of LGBTQ Finance: A Survey of 2,000 Americans, The Motley Fool and Debt Free Guys, September 28, 2024. ↩︎
  5. “Financial well-being and literacy in a high-inflation environment,” TIAA Institute and Global Financial Literacy Excellence Center, April 2023. ↩︎
  6. Stepping Into the Future: Employers, Workers, and the Multigenerational Workforce, Transamerica Institute, May 2023. ↩︎
  7. “It’s Time to Prioritize Employees’ Financial Health,” Harvard Business Review, January 2, 2024. ↩︎
  8. “Why You Need to Care About Your Employees’ Financial Health” Forbes, June 24, 2021. ↩︎
  9. “These 3 unique challenges have an ‘overarching effect’ on LGBTQ people’s finances,” CNBC, June 30, 2023. ↩︎
  10. Nearly 1 in 3 LGBTQIA+ Respondents Say They’ve Experienced Discrimination, Bias in Financial Services, National Endowment for Financial Education, June 24, 2022 ↩︎
  11. Discrimination and Barriers to Well-Being: The State of the LGBTQ+ Community in 2022, Center for American Progress, January 12, 2023 ↩︎
  12. “Guide to Finance for LGBTQ People,” Investopedia, August 21, 2023. ↩︎
  13. Mapping Attacks on LGBTQ Rights in U.S. State Legislatures in 2024, American Civil Liberties Union, 2024. ↩︎
  14. Talent on the Move: Where Do We Go From Here?, Out and Equal, March 2024. ↩︎
  15. Understanding the Financial Lives of LGBTQI+ People in the United States, Center for LGBTQ Economic
    Advancement and Research and Movement Advancement Project, March 2023. ↩︎
  16. LGBT Poverty in the United States: A Study of Differences Between Sexual Orientation and Gender Identity Groups, UCLA School of Law Williams Institute, October 2019. ↩︎
  17. “States confront medical debt that’s bankrupting millions,” Associated Press, April 12, 2023. ↩︎
  18. “Access to Employer-Sponsored Health Coverage for Same-Sex Spouses: 2020 Update,” KFF, November 30, 2020. ↩︎
  19. Unlocking the Full Potential of Financial Wellness Benefits, SHRM and Morgan Stanley at Work, 2021. ↩︎
  20. “A new approach to financial planning for LGBTQ+ employees”, Mercer, June 1, 2023. ↩︎
  21. “The Staggering Costs of Being Transgender in the US, Where Even Patients with Health Insurance Can Face Six-figure Bills,” Business Insider, July 10, 2019 ↩︎
  22. “Average Adoption Costs in the United States,” Family Equality Council. ↩︎
  23. “Average Cost for the LGBTQ+ Community to Achieve Pregnancy in the United States,” Family Equality Council. ↩︎
  24. “How Much Surrogacy Costs and How to Pay for It,” U.S. News & World Report, May 30, 2023. ↩︎
  25. “Employers Eye Benefits to Support LGBTQ+ Employees,” SHRM, June 20, 2023. ↩︎
  26. “It’s Time to Prioritize Employees’ Financial Health,” Harvard Business Review, January 2, 2024. ↩︎
  27. “A new approach to financial planning for LGBTQ+ employees,” Mercer, June 1, 2023 ↩︎
  28. Ibid. ↩︎
  29. “44% of Americans can’t pay an unexpected $1,000 expense from savings. We’re just not ‘wired’ to save, expert says,” CNBC, January 24, 2024. ↩︎
  30. Unlocking the Full Potential of Financial Wellness Benefits, SHRM and Morgan Stanley at Work, 2021. ↩︎
  31. “A new approach to financial planning for LGBTQ+ employees,” Mercer, June 1, 2023. ↩︎
  32. “LGBTQ+ Americans are less confident than straight peers when it comes to saving for retirement,” CNBC, June 30, 2022. ↩︎
  33. Retirement Confidence Survey and the LGBTQ Community, Employee Benefit Research Institute, June 2022. ↩︎
  34. “Federal Student Loan Debt Among LGBTQ+ People” Williams Institute, UCLA, and the Point Foundation, 2021. ↩︎
  35. Unlocking the Full Potential of Financial Wellness Benefits, SHRM and Morgan Stanley at Work, 2021. ↩︎
  36. Ibid. ↩︎

OUR VISION

Global workplaces where all people are equal, belong, and thrive.

OUR MISSION

Out & Equal is the global convener, thought leader and catalyst actively working to achieve workplaces of equality and belonging - supporting LGBTQ+ employees and leaders who thrive in their careers and lives and achieve greater impact on the world.