LGBTQ+ Finances: A Survey of 2,005 Americans

At least 7% of American adults -- some 20 million people -- identify as LGBTQ+, and those Americans make up an important part of the United States' social and economic fabric.

Yet data on the financial state of LGBTQ+ Americans is lacking. That lack of data makes it more difficult for financial advisors and financial service providers to serve a group of Americans larger than the population of New York. This is a group with an estimated purchasing power of $1.4 trillion, making them an important part of the economic and social fabric of the United States.

So The Motley Fool and the Debt Free Guys teamed up to gain a better understanding of LGBTQ+ finances. Through the LGBTQ+ Money Study, a landmark survey of 2,005 LGBTQ+ Americans -- including over 700 transgender Americans -- we found that many LGBTQ+ Americans face challenges to achieving long-term financial health and generational wealth. 

During Pride Month in June, LGBTQ+ Americans will be celebrated. The community's progress toward financial equity, inclusion, and independence should be part of that celebration. Armed with better data, even more progress toward an inclusive and equitable financial system is now possible. 

Key findings

• LGBTQ+ Americans are less likely to use important financial tools -- like retirement savings, life insurance, and estate plans -- than Americans overall, and most don't feel ready to make important financial decisions. 
• Two-thirds of LGBTQ+ Americans carry a high amount of financial stress. Keeping up with the cost of living and being ready for a financial emergency are their top financial concerns. 
• Nearly half of LGBTQ+ Americans have experienced discrimination by someone in financial services, and a similar percentage say this has contributed to some lack of financial security.
• LGBTQ+ Americans are more likely to have student loan debt, credit card debt, and personal loan debt than Americans overall, but less likely to have a mortgage or auto loan.

Relevant definitions

The following terms are used throughout this article (definitions taken from the Human Rights Campaign's Glossary of Terms:

• LGBTQ+: An acronym for "lesbian, gay, bisexual, transgender and queer" with a "+" sign to recognize the limitless sexual orientations and gender identities used by members of our community.
• Lesbian: A woman who is emotionally, romantically or sexually attracted to other women. Women and non-binary people may use this term to describe themselves.
• Gay: A person who is emotionally, romantically or sexually attracted to members of the same gender. Men, women and non-binary people may use this term to describe themselves.
• Bisexual: A person emotionally, romantically or sexually attracted to more than one sex, gender or gender identity though not necessarily simultaneously, in the same way or to the same degree. Sometimes used interchangeably with pansexual.
• Transgender: An umbrella term for people whose gender identity and/or expression is different from cultural expectations based on the sex they were assigned at birth. Being transgender does not imply any specific sexual orientation. Therefore, transgender people may identify as straight, gay, lesbian, bisexual, etc.
• Queer: A term people often use to express a spectrum of identities and orientations that are counter to the mainstream. Queer is often used as a catch-all to include many people, including those who do not identify as exclusively straight and/or folks who have non-binary or gender-expansive identities. This term was previously used as a slur, but has been reclaimed by many parts of the LGBTQ+ movement.
• Genderqueer: Genderqueer people typically reject notions of static categories of gender and embrace a fluidity of gender identity and often, though not always, sexual orientation. People who identify as "genderqueer" may see themselves as being both male and female, neither male nor female or as falling completely outside these categories.
• Nonbinary: An adjective describing a person who does not identify exclusively as a man or a woman. Non-binary people may identify as being both a man and a woman, somewhere in between, or as falling completely outside these categories. While many also identify as transgender, not all non-binary people do. Non-binary can also be used as an umbrella term encompassing identities such as agender, bigender, genderqueer or gender-fluid.

A timeline of LGBTQ+ financial progress

LGBTQ+ Americans are less likely to use important financial tools than the general population

While the percentage of LGBTQ+ Americans who have a bank account is similar to that of the overall U.S. population, LGBTQ+ Americans are less likely to have a retirement account, non-retirement investing account, life insurance, health insurance, or disability or critical illness insurance. 

These are essential tools that form the foundations of financial independence.

Transgender Americans are more likely to use these financial products than lesbian, gay, and bisexual Americans or those who are genderqueer/nonbinary. Transgender Americans are also just as likely as the overall U.S. population to have a brokerage account, life insurance, health insurance, and government pension. 

Homeownership is a financial milestone and an important way to build wealth. However, only 26% of LGBTQ+ Americans have a mortgage compared to 40% of the overall population, which indicates a lower rate of homeownership. Overcoming that disparity is a crucial part of building equality and wealth for LGBTQ+ Americans. 

Cryptocurrency wallets are the one financial product that LGBTQ+ Americans are more likely to have than the overall U.S. population: 36% of LGBTQ+ Americans have one compared to 16% of the overall population.

Data sources: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022; U.S. Census Bureau; Pew; Gallup; The Federal Reserve; LIMRA; Bureau of Labor Statistics.

In practice, narrowing the gap in the use of financial tools means more LGBTQ+ Americans with retirement accounts, brokerages, insurance, and mortgages -- all important financial products for any individual.

Two-thirds of LGBTQ+ Americans have a high amount of financial stress

Two-thirds of LGBTQ+ Americans carry a high amount of financial stress, with 28% saying their financial stress on an average day is "very high" and 38% reporting "somewhat high" financial stress. 

Only 8% of respondents have "very low" financial stress on an average day. Another 26% of LGBTQ+ Americans report "somewhat low" financial stress.

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

Most LGBTQ+ Americans also stress about their finances frequently. In fact, 32% say they stress about their finances daily and 26% say they do so weekly. 

Another 26% say they do so monthly, and just 16% stress about their finances less than once a month. 

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

LGBTQ+ Americans aren't alone -- financial stress is on the rise. Financial stress can take a mental toll, so it's best to address it if possible. To do so, it's necessary to understand what the drivers of financial stress are. 

Keeping up with the cost of living and preparing for an emergency are the top financial concerns for LGBTQ+ Americans

Keeping up with the cost of living was cited by 67% of LGBTQ+ Americans as a top-three financial worry, making it the most cited concern. 

What's more, 60% listed an unplanned financial emergency among their top concerns. 

LGBTQ+ Americans are least likely to be concerned about not being able to afford a child's education and not being able to buy a home.

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

The top financial worries of LGBTQ+ Americans align with their top financial priorities. 

In the survey, 62% said keeping up with the cost of living was a top-three financial priority. And 55% listed saving for a financial emergency as a top priority.

The least cited priorities were investing for reasons other than retirement, saving or paying for a child's education, and buying a home. 

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

Given the current high rate of inflation, it's no surprise that keeping up with the cost of living is the top financial priority and worry among LGBTQ+ Americans. The rising cost of living may make saving more difficult, so it's logical that this would be the second-most cited financial concern and priority. 

Nearly half of LGBTQ+ Americans have experienced discrimination by someone in financial services

Forty-eight percent of LGBTQ+ Americans have experienced discrimination by someone in the financial services, banking, or investing industries. That number is even higher among transgender Americans, 67% of whom report being discriminated against.

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

Financial discrimination not only causes emotional harm, but can cause financial damage or deny people financial opportunities that would otherwise be afforded.

Forty-four percent of LGBTQ+ Americans attribute some financial insecurity they experience to discrimination they've faced. Again, that percentage is higher among transgender Americans. 

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

Less than half of LGBTQ+ Americans feel ready to make most major financial decisions 

Less than 50% of LGBTQ+ Americans feel ready to make major financial decisions, like paying off debt, building a rainy day fund, buying a home, retirement planning, or investing. While working with a professional can make financial planning much easier, getting the education needed to make some of these decisions on your own can be helpful.

Forty percent of LGBTQ+ Americans are confident in their decision-making when it comes to paying off credit card debt and doing their own taxes.

However, less than 30% feel prepared to make decisions regarding buying a home, paying off student loan debt, reaching financial independence, retirement planning, investing, or starting a small business or side hustle. 

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

The data suggests that financial education for LGBTQ+ Americans may be lacking or that LGBTQ+ Americans don't feel as though financial education resources are made for them. Americans who are part of underrepresented groups often lack financial role models who can mentor them through financial challenges and milestones. 

38% of transgender Americans earn more than $100,000 per year compared to 31% of Americans overall

Twenty-six percent of LGBTQ+ Americans make $100,000 or more annually compared to 31% of Americans overall. However, 38% of transgender Americans make six figures. 

Lesbian, gay, and bisexual Americans and genderqueer/nonbinary Americans are both less likely to make six figures than the overall population. 

This income gap can compound other financial disparities or forms of discrimination the LGBTQ+ community faces.

Still, 56% of both LGBTQ+ Americans and the total population make less than $75,000 a year. 

A higher percentage of LGBTQ+ Americans make between $50,001 and $75,000 than the broader U.S. population. Those with an annual income in that range make close to the 2020 median household income of $67,521. 

Data sources: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022; U.S. Census Bureau.

28% of LGBTQ+ Americans don't have access to a company-sponsored retirement plan

Twenty-eight percent of LGBTQ+ Americans don't have access to a company-sponsored retirement plan, like a 401(k), while 9% have access to one but opt not to contribute. 

Twenty-three percent contribute 1% to 3% of their paycheck to a company-sponsored retirement plan, 27% contribute 4% to 6%, and 14% contribute 7% or more. 

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

As a rule of thumb, it's recommended that you contribute to your 401(k) at least as much as your employer will match. Not doing so leaves free money from your employer on the table. 

Only 39% of LGBTQ+ Americans think they're on track to retire by the age they'd like

Thirty-nine percent of LGBTQ+ Americans think they're on track to retire at the age they would like to. A third don't think they're on track, and another 28% aren't sure.

Transgender Americans are more confident about their retirement outlook than lesbian, gay, and bisexual Americans and genderqueer/nonbinary Americans. 

Fifty-three percent of transgender respondents say they're on track to retire when they'd like, compared to 30% of lesbian, gay, and bisexual Americans and 34% of genderqueer/nonbinary Americans. 

Transgender Americans are also the least likely to say they're not sure if they're on track to retire at the age they'd like to or that they don't think they'll be able to. 

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

44% Of LGBTQ+ Americans have a brokerage account

Forty-four percent of LGBTQ+ Americans have a non-retirement investing account.

A non-retirement investing account, or a brokerage account, provides investors with access to their investments at any time as well as freedom over what to invest in. Retirement investment accounts, like a 401(k) or IRA, offer tax advantages compared to brokerage accounts but have penalties for withdrawing funds if the owner is younger than 55-and-a-half years old, and provide investors with less choice in what to invest in. 

That 44% isn't equally split among the subgroups we surveyed, though. Only 37% of lesbian, gay, and bisexual Americans and 38% of genderqueer/nonbinary Americans said they have a non-retirement account for trading stocks. 

On the other hand, 56% of transgender Americans report having a taxable brokerage account. The same percentage of the broader U.S. population (56%) own stocks.

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

Not knowing how to invest or what to invest in are the most cited reasons among LGBTQ+ Americans for not having an investment account 

What's stopping LGBTQ+ Americans from investing? 

Seventeen percent of respondents said they don't know how to invest, making it the most cited reason. Fourteen percent said they don't know what to invest in.

Some LGBTQ+ Americans feel that investing doesn't seem like it's for them. Ten percent think it is too risky or intimidating, 7% feel like investing tools aren't made for them, and 2% think investing is ethically wrong. 

Data source: The Motley Fool/Debt Free Guys survey distributed on April 13, 2022.

Those are all valid concerns that can be allayed. But they suggest that LGBTQ+ Americans, like other underrepresented groups, may feel excluded by the culture surrounding investing. 

Investing is a proven way to build wealth over time, regardless of sexual orientation, gender identity, race, or ethnicity. Being a first-time investor can be intimidating, but there are many resources and guides to get started. 

61% of LGBTQ+ Americans with a brokerage account add funds at least once a month 

Investing early and often despite market volatility is fundamental to success, so it's encouraging to see that 61% of LGBTQ+ Americans who have a brokerage account add funds at least once a month. 

Only 8% of LGBTQ+ Americans don't add funds to their brokerage account on a regular schedule, another positive sign. 

Transgender Americans tend to add funds more frequently and are more likely to have some sort of schedule for putting additional money into their brokerage accounts. 

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

Compared to Americans overall, LGBTQ+ Americans are more likely to have student loan debt, credit card debt, and personal loan debt, but less likely to have auto debt and a mortgage

LGBTQ+ Americans are more likely to have student loan debt, credit card debt, and personal loan debt than the national population. And they are less likely to have auto loans or a mortgage. 

Credit card debt, student loan debt, and personal loan debt can create financial and emotional stress. Credit card debt and personal loan debt in particular can come with high interest rates and can be difficult to pay off. 

Auto loan debt and mortgage debt, on the other hand, are more manageable debts for many. Auto loans and mortgages are often the only ways to finance the purchase of a car and home, and paying off a mortgage builds home equity. 

The disparities in these categories show that LGBTQ+ Americans, compared to all Americans, are more likely to have financially burdensome debt and less likely to have debt that can help them build wealth over time, as is the case with mortgage debt.

Data sources: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022; The Federal Reserve.

LGBTQ+ Americans have more credit card debt than the average American

LGBTQ+ Americans carry slightly more credit card debt than the national average, but they carry less student loan and personal debt -- even though they are more likely than the average American to have these kinds of loans. 

The median credit card debt among LGBTQ+ Americans surveyed by The Motley Fool is $3,000, while the median credit card debt among all Americans is $2,700. 

LGBTQ+ Americans hold a median of $12,000 in student loan debt, which is $10,000 less than the national average. 

Data sources: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022; The Federal Reserve.

LGBTQ+ Americans are less likely to have a credit score between 800 and 850 than the general U.S. population

A lower percentage of LGBTQ+ Americans have an excellent (800–850) or very good (740–799) credit score than the overall population, while they are more likely to have a fair (580–669) or good (670–739) credit score. 

Credit scores are important. They are used to determine whether a bank will provide a loan, what interest rate they will charge the borrower, and which credit cards you may qualify for. 

The difference in credit scores between LGBTQ+ Americans and the U.S. overall is small. Just 24% of LGBTQ+ Americans have a credit score between 740 and 799 compared to 25% of all Americans. And 16% of LGBTQ+ Americans have a credit score between 800 and 850 compared to 20% of all Americans. 

A higher percentage of transgender Americans have a credit score between 740 and 799 than the total U.S. population. Among LGBTQ+ Americans, a higher percentage of transgender individuals have a score between 800 and 850 than lesbian, gay, and bisexual individuals and those who identify as genderqueer/nonbinary.

Data sources: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022; The Ascent report: Average Credit Score in America. *The previous survey only asked this question of people who reported knowing their credit score.

Notably, 8% of LGBTQ+ Americans say they don't know their credit score. Knowing your credit score is necessary to understand what types of financial products, including credit cards and loans, may be available to you and at what rates. Thankfully, there are a number of free ways to check your credit score. 

52% of LGBTQ+ Americans have under $10,000 in savings compared to 43% of Americans overall

LGBTQ+ Americans have less non-retirement savings than Americans overall, with 52% having less than $10,000 saved compared to 43% of Americans overall.

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022; The Motley Fool (2022). "Study: Average American's Savings Account Balance is $4,500."

However, a higher percentage of LGBTQ+ Americans have a savings account than Americans overall. 

Transgender Americans tend to have more savings than lesbian, gay, and bisexual Americans and those who are genderqueer/nonbinary. And with the average American's savings balance sitting at $4,500, transgender savers are doing well.

Not making enough money is the most cited barrier to saving more among LGBTQ+ Americans

What's keeping LGBTQ+ Americans from saving more? Not making enough money is the most cited reason, with 42% of respondents saying their earnings are the primary barrier to saving more. 

Just over a fifth of LGBTQ+ Americans say they're happy with the amount they're saving. A general rule is to have savings worth 15% to 20% of your annual salary. 

Fourteen percent of our respondents said they would rather invest their extra money. While savings accounts do provide interest, investing can yield better returns over a longer period of time. 

Thirteen percent of LGBTQ+ Americans say they lack the discipline to save more. One remedy is to put your savings on autopilot by setting up automatic deposits into your savings account.

14% of LGBTQ+ Americans don't have health insurance compared to 9% of Americans overall

LGBTQ+ Americans are less likely to have health insurance than the national population. 

They are also less likely to be on an employer-sponsored healthcare plan and more likely to have purchased health insurance through the open market. 

Data sources: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022; U.S. Census Bureau.

Access to healthcare is a fundamental part of financial freedom. Health emergencies can lead to major financial strain or even bankruptcy, and health insurance can make those emergencies financially manageable. 

30% of LGBTQ+ Americans who have employer-sponsored health insurance aren't able to cover their partner

Many Americans have the option to join their spouse's employer-provided health insurance, which can get them better coverage or lower premiums. However, 30% of LGBTQ+ Americans are not able to add their partner to an employer-provided health insurance policy.

Fourteen percent say that is because their employer doesn't provide partner coverage, 9% percent say their partner can't receive coverage because their employer-provided plan only covers married couples, and 7% say their employer does not provide same-sex partner coverage. 

Over 90% of employers offer health insurance that can provide coverage to an employee's spouse, but only 74% of employers offered same-sex spousal health benefits, according to data collected by the Kaiser Family Foundation in 2020.

Data source: The Motley Fool/Debt Free Guys survey distributed on April 18, 2022.

The state of LGBTQ+ financial well-being

LGBTQ+ Americans face unique challenges when it comes to financial well-being. Nearly half of them have faced discrimination by someone in financial services, and two-thirds carry a high amount of financial stress.

They tend to make less and have less savings than the broader U.S. population. They are less likely to have a credit score in the "excellent" range, a mortgage, or auto loan debt while being more likely to have credit card debt, student loan debt, and personal loan debt. 

LGBTQ+ Americans face structural barriers as well -- many cannot choose to be covered by their partner's employer-provided health insurance, for example. 

Making progress on any of these issues requires first acknowledging that LGBTQ+ Americans face financial disparities and outright discrimination. Through a better understanding of the financial state of LGBTQ+ Americans, individuals, companies, and other organizations can create a more inclusive and equitable financial system.

Fortunately, there are many financial professionals and LGBTQ+ content creators who are actively working to educate and support the community in their efforts to gain financial equality.

Sources

• The Federal Reserve (2020). "Survey of Consumer Finances."
• Kaiser Family Foundation (2020). "Access to Employer-Sponsored Health Coverage for Same-Sex Spouses: 2020 Update."
• LIMRA (2021). "2021 Insurance Barometer Study."
• Pew Research Center (2021). "16% of Americans say they have ever invested in, traded or used cryptocurrency."
• United States Census Bureau (2020). "American Community Survey: Income in the Past 12 Months."
• United States Census Bureau (2021). "Health Insurance Coverage in the United States: 2020."

Methodology

The Motley Fool, in partnership with the Debt Free Guys, surveyed 2,005 Americans on April 18, 2022 via Pollfish. 49.93% of respondents identified as lesbian, gay, or bisexual, 35.01% identified as transgender, and 15.06% identified as genderqueer/nonbinary.

What about asexual/intersex/demisexual individuals? Or any other queer-identifying group?

The decision to focus on lesbian, gay, bisexual, transgender, and genderqueer/nonbinary Americans came after reviewing available data and much reflection on how to best serve the LGBTQ+ community.

There are many other people who fall under the LGBTQ+ umbrella, including asexual, aromantic, intersex, demisexual, androgyne, neutrois, agender, pansexual, and countless more. To effectively draw conclusions for all of these groups, we would have had to first come up with a list of groups to survey and then ensure that the sample size of each group was large enough to justify making claims about their financial state. This was prohibitive in numerous ways, so we kept our definitions simple and focused on the largest and most visible groups.

In no way do we intend to downplay the importance of any other LGBTQ+ groups, but the first run of this survey required us to think very pragmatically about how many people we could reliably identify and survey.