Retirement is a struggle for gays and lesbians; bias can be financially costly
By Ken Sweet
Retirement should have been a “slam dunk,” the 62-year-old Texas widow says. She saved and bought a house with her spouse, and she has a pension through her employer.
But Murphy’s golden years have not been as secure as they should have been. She is missing out on thousands of dollars a year in Social Security benefits simply because she was married to a woman, not a man.
Murphy fell into a loophole in Social Security that denies survivor benefits to same-sex couples depending on what state they live in. Had Murphy and her wife, Sara Barker, lived next door in New Mexico, a state that does recognize same-sex marriage, this wouldn’t have been an issue.
“If I had been straight, getting widow’s benefits would have been a slam dunk,” Murphy said. “I never thought I would live to see same-sex marriage, but the government still minimizes my marriage and my relationship of 32 years.”
Murphy could be thought of as just one of the many baby boomers who are not prepared for retirement. But while the group overall is not ready to retire, gay baby boomers face challenges that make them even more vulnerable, experts say.
For many, decades of workplace discrimination impaired their earning potential. The AIDS crisis caused lasting financial and psychological damage, particularly for gay men. And legal pitfalls within Social Security, the cornerstone in any senior’s financial planning, have left gay baby boomers ill-equipped for retirement.
Same-sex couples in general are likely to have saved far less for retirement than their straight counterparts, according to an exclusive analysis of the Federal Reserve’s Survey of Consumer Finances by the Associated Press-NORC Center for Public Affairs Research. The center is jointly operated by the AP and NORC, a leading social research center at the University of Chicago.
The median retirement savings for a same-sex couple is about $66,000, while straight married couples have about $88,000, according to the data, which look at the finances of straight and same-sex couples ages 19 to 95, dating to 2001.
This data, as well as other studies, show that lesbian, gay, bisexual and transgender adults tend to be poorer, in worse health, and most often, alone — with no family to care for them when they reach old age.
“In the aging world, there has been little regard for even the existence of LGBT older people, let alone their particular social and financial needs,” said Michael Adams, executive director of Services and Advocacy for Gay, Lesbian, Bisexual and Transgender Elders, or SAGE.
When financial firm Prudential asked LGBT adults ages 25 to 68 last year whether they were “well prepared” for retirement, only 14 percent said they were, compared with 29 percent of the total population.
And in a sad irony, many of the aging pioneers of gay rights are too old to reap the retirement benefits from the marriage laws that they championed.
Gays and lesbians have faced higher unemployment, lower wages and a workplace where discrimination based on sexual orientation was common. While many corporations have non-discrimination policies now, it is still legal to fire someone for their sexual orientation in 21 states, according to the American Civil Liberties Union.
Two polls, one by the Pew Research Center in 2013 and one by Gallup in 2012, reached the same conclusion: LGBT individuals were more likely to make less money than their straight peers during their careers. Gay men earned as much as 32 percent less than straight men, according to research by the Williams Institute, a think tank at UCLA that focuses on LGBT issues.
As a result, gay men and women over 65 are more likely to end up in poverty. Lesbians, who face wage discrimination because of their gender and sexual orientation, are even more vulnerable.
Being LGBT “just amplifies the financial problems women already face in the workforce,” said Ineke Mushovic, executive director of the Movement Advancement Project, a Denver-based think tank for LGBT issues.
The 2012 Gallup poll found that 15.9 percent of gay men over 65 were near or below the federal poverty line, compared with 9.7 percent of heterosexual men in the same age group. While the Gallup poll showed poverty rates for straight and gay women to be statistically similar, other studies, including a 2009 report by the Williams Institute, showed that lesbian couples over the age of 65 were twice as likely to live below the poverty line as opposite-sex couples and were much more likely to be on public assistance programs such as food stamps.
Married without benefits
Gay couples were extended only recently the core element of the retirement safety net available to married straight couples: inheritance of a spouse’s Social Security benefits and pensions. But even with the recent expansion of gay marriage, same-sex couples still face discrimination when it comes to benefits.
When a husband or wife in a straight marriage dies, their spouses can typically collect Social Security benefits based on the higher earner’s work history. But that’s not the case for many gay spouses. Only widows or widowers in states that recognize same-sex marriage can receive that higher income.
Why? Social Security differs from most federal programs in that the law requires it to use individual states’ definition of marriage. Because of that, the Obama administration was unable to extend Social Security benefits to all same-sex couples nationwide, even after the Supreme Court struck down the a key part of the Defense of Marriage Act last year. Before then, the federal government did not recognize same-sex marriage at all, even in states where it was legal. Domestic partnerships are still not recognized by the federal government.
In Florida, Arlene Goldberg faces a retirement of significantly less income. When her partner of 47 years, Carol Goldwasser, died in March, Goldberg was denied her wife’s Social Security survivor benefits because Florida does not recognize same-sex marriage.
Goldwasser’s death certificate said “single, never married,” even though the couple wed in New York in 2011. Had they been living in New York, Goldberg would earn $800 more in monthly benefits.
“The Social Security problems were bad, but the fact they listed Carol as single was the worst possible thing they could have done to me,” Goldberg said.
The state of Florida revised Goldwasser’s death certificate in October to recognize the couple’s marriage, but Goldberg has not received any federal benefits.
“The Social Security Administration knows this is a problem, but there is little they can do, because they’re bound to the letter of the law,” said Karen Loewy, a senior attorney at Lambda Legal, a national organization focused on legal issues affecting the LGBT community.
In the case of Murphy and Baker, the couple got married in Massachusetts in 2010. Baker died in 2012, and since then, Murphy has been unable to collect her wife’s benefit of $583 a month. Same-sex marriage has been legal in Massachusetts since 2003 — but it is not allowed in Texas — and the federal government is required to use the couple’s state of residence to determine benefits.
“I try not to worry about money, but it’s about fairness,” Murphy said.
This is not the first time state marriage laws and Social Security has been at odds. The denial of benefits to mixed-race couples was cited by the Supreme Court in 1967, when it struck down laws that barred blacks and whites from marrying. For gay couples, the state laws that block federal benefits amount to similar discrimination, advocates say.
Government agencies have little understanding of the scope of problems facing the LGBT demographic. The Administration on Aging, part of the Department of Health and Human Services, collects data on aging minority groups such as African Americans, Native Americans and Hispanics, but not on gay individuals. Based on these surveys, the federal government allocates money toward specific elderly programs.
The White House has called for legislation to allow same-sex couples to access survivor benefits in all states. It also has asked for an update of the Older Americans Act to authorize data collection on LGBT individuals. But there has been little momentum in Congress to take up these issues.
“We’re not talking about some fringe benefit here,” SAGE’s Adams said. “Social Security is the most important financial resource for older Americans in this country, and this is just as true for LGBT older Americans.”