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The Evolving LGBT Financial Experience: 5 Research Insights Marriage, taxes, and estate-planning have become easier. But equality may still be blamed for the income gap and financial stress.

By Kent Sluyter Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

In light of this month's tragedy in Orlando, many Americans -- and American companies as well -- are doing some deep soul-searching about the hatred in our society toward the LGBT community.

Related: How the Gay Marriage Decision Affects Every Small Business

But, regardless of where people stand, the higher profile of that community is now reality, particularly in light of the the U.S. Supreme Court's 2015 landmark decision recognizing the legality of same-sex marriage in all 50 states.

Yet, even as we've come a long way to guarantee equal rights for the LGBT community, there is still work to be done. Prudential Financial published its first ground-breaking report exploring the financial needs of LGBT Americans back in 2012. This year's follow-up study, the LGBT Financial Experince, expands those findings, finding that LGBT respondents surveyed are marrying more and becoming parents more than in the past.

But they're also in need of financial planning for the future and feeling financial stress from the continued reality of social inequality.

A takeaway from the report stems from the fact that, for entrepreneurs and small businesses, an essential aspect of employee retention is the need to provide education, awareness and support around financial wellness. Clearly, businesses need to understand the financial situations, concerns and goals of LGBT households. Here are five key insights from the report to help the entrepreneurial community's efforts to support this vibrant community.

1. Marriage equality changes financial goals and simplifies financial lives.

The evolution of the law and the granting of basic rights to the LGBT community have clearly impacted the structure of LGBT households: Fewer respondents surveyed in 2016, for instance, are single (36 percent) compared to those surveyed in 2012 (50 percent). Indeed, the rate of marriage has more than tripled in the past four years: 8 percent of LGBT respondents were married in 2012, compared to percent in 2016.

In addition, the number of LGBT parents has more than doubled over the past five years: in 2012, 15 percent had children in 2012, while 39 percent of LGBT respondents have children in 2016.

The goals of LGBT families have also shifted as the make-up and structure of these families has evolved. Individuals now say that they are increasingly concerned with taking care of parents or other family members, and with the planning required to pass along money to loved ones.

LGBT respondents who have entered legally recognized, same-sex marriages indicated that marriage has simplified their financial lives. Individuals also indicated that taxes, insurance coverage and estate planning had become easier since the Supreme Court ruling.

2. LGBT individuals are 'spenders,' yet still seek ways to save.

Both the LGBT and non-LGBT respondents were very focused on savings and retirement. Seven in 10 agreed that being financially independent, with enough savings to last a lifetime, was very important to them. Independence was a top financial goal, regardless of gender, generation and sexual orientation.

That being said, LGBT individuals indicated that they were more likely to consider themselves "spenders" (48 percent), compared to the general population (32 percent). And current spending patterns confirm that they do indeed spend more and save less. Although LGBT respondents said they had aspirational goals when it comes to fiscal prudence, they were further from achieving their ideals for saving money because of this inclination.

3. Lack of preparation for the future may be linked to the lack of equality.

While financial situations within the LGBT community have remained stable over the last five years, fewer LGBT individuals are taking adequate steps to prepare for their financial future. In fact, fewer LGBT respondents in 2016 (compared to 2012) had started saving or investing for retirement; had insurance; or had a will or an estate plan.

Related: Big Business Leaders Urge Repeal of Mississippi Law Opposed by LGBT Community

LGBT respondents today also seemed to be planning less for their financial futures than the general population: Fewer indicated that they had invested in retirement products, life insurance, health insurance or a will or estate plan.

While the income gap is commonly viewed through the lens of gender inequality, there is also a significant income gap linked to sexual orientation. On average, heterosexual women earn less than heterosexual men, bisexual women earn less than bisexual men and lesbian women earn less than gay men. Likewise, on average, lesbian women surveyed earned less than heterosexual women.

4. For some, financial stress takes an emotional toll.

Financial concerns appeared to be taking an emotional toll on some within the LGBT population members surveyed. While more said they believed they had a lot of financial freedom (15 percent, versus 2 percent in 2012), more felt they were struggling financially (41 percent, versus 31 percent in 2012). This was a pattern that held true for all three generations. In addition, LGBT respondents were more likely to say they were struggling financially than were respondents within the general population (41 percent, versus 27 percent of general population).

When asked how thinking about their financial future made them feel, LGBT respondents' comments surfaced a lot of concern: Many used words such as "worried," "nervous," "anxious" and "uncertain." The reason for these emotions was often linked to a lack of savings or preparation for the future.

5. In the journey to achieve goals, knowledge is critical.

In order to plan for a secure financial future and achieve your financial goals, it is vital to understand best practices. The LGBT community members surveyed overwhelmingly said that they needed more information and experience in order to tackle their financial goals. Compared to the general population, LGBT individuals also indicated that they felt less comfortable managing an investment portfolio on their own.

When asked why they did not feel prepared to make wise financial decisions, LGBT respondents indicated that they did not know what options were available to them, did not know what to consider when evaluating those options and did not know how to get started.

Overall, the LGBT community has made progress in terms of certain legal protections, especially those concerning marriage equality. That being said, however, more needs to be done to support the community as its members strive toward total equality and achievement of their financial goals.

Related: These Are the 100 Most Powerful LGBT Executives in the World

Employers, friends, family and advisors need to better understand their specific hopes, concerns and dreams, and work to provide the resources the LGBT community needs to achieve financial security.

Kent Sluyter

CEO, Individual Life Insurance and Prudential Advisors

Kent Sluyter is chief executive officer of Prudential Individual Life Insurance and Prudential Advisors. In his role, Sluyter is responsible for ensuring that Prudential’s legacy of commitment to customers is met, maintaining strong business fundamentals, and driving strategic initiatives to support new growth opportunities for the Life Insurance business.

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