Retirement Planning for Gay Couples – Part 1

Retirement Planning Retirement Planning for LGBT Couples June 15, 2016 Author: Woody Derricks

Retirement Planning for Gay Couples,

Part 1: Social Security, Medicare, Retirement Benefits

Retirement planning has just gotten a bit easier for same-sex married couples. In 2015, the U.S. Supreme Court determined in Obergefell v. Hodges that same-sex couples have a constitutional right to marry in all states and have their marriages recognized by other states.  This decision gave same-sex married couples the same access to federal benefits as opposite-sex married couples regardless of the state they live in.  For unmarried same-sex couples, unfortunately, the same benefits do not always apply.

Social Security & Medicare

Same-sex married couples can now claim spousal-related Social Security benefits and are now recognized for all parts of Medicare in all states. Unmarried same-sex couples are not eligible for these benefits unless they are in civil unions or registered domestic partnerships and live in a state that recognizes that type of relationship.

Something to consider, it is still not clear how the Social Security Administration will handle the marriage duration requirement for same-sex married couples. There will be more to come on that.  In the meanwhile, apply right away for benefits, even if you are not sure if you are eligible. Applying for benefits sets the filing date which is used to determine the start of benefits.

There is also a “marriage penalty” aspect to Medicare to be aware of. Medicare has hight income premium surcharges for certain parts, Part B and Part D, which kicks in at $85,000 for individuals and at $170,000 for joint filers. Joint filers with one high earner will pull the lower-income spouse into surcharge territory.

Employer Retirement Benefits

Most employer sponsored retirement benefit plans have provisions related to an employee’s legal spouse. Private employers and the federal government have been required by federal law since the Windsor decision in 2013 to provide equal treatment to same-sex spouses. Since the 2015 Obergefell v. Hodges decision, all state and local governments are required to recognize same-sex spouses as well. A retirement plan offered through a church or other religious organization may be required to provide benefits to same-sex spouses if it is subject to federal law governing retirement benefits and/or federal law prohibiting employment discrimination based on sex.

As with Social Security, marriage duration requirements may be an issue. Check your plan. If you have not been married for the required number of years, retired before your marriage was recognized, or retired before you were able to marry your same-sex spouse and are being denied benefits, you might want to advocate with your employer or plan administrator to amend the plan. This has been done successfully in the past. The IRS has made clear that retirement plans may be amended to recognize the marriages of same-sex couples prior to the date of the Windsor decision.

Employers are not legally obligated to provide benefits to domestic partner. However, amendments to the Pension Protection Act in 2008 allow non-spouse beneficiaries to rollover inherited benefits directly into an IRA. And a 2012 study by the Human Rights Campaign ( found that a little over three-quarters of employers that provide retirement benefits provide survivor option for domestic partners.

Be sure to review your retirement benefits plan to see what options exist for your situation and to make sure that your designations and elections are accurate, complete and reflect your wishes.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Partnership Wealth Management is comprehensive financial services company. We are committed to providing our clients with financial planning and wealth management services to help them make the most of their investments. At Partnership Wealth Management we have a long history of working with the LGBT community. Among our many services we offer financial planning for gay couples and lesbian couples as well as estate planning for gay couples and lesbian couples. Financial planning is an important part of preparing for the future. Contact us today to get started: