Retirement Planning if You Stay Home with Your Kids

When you make the decision to have one parent stay at home with your children, you may be making some financial sacrifices in order to make it happen. You should not use this as an excuse to stop saving for retirement.  Making financial sacrifices means that you may not be eating out anymore and that you may not be going on as many vacations. In addition, you may be relying on just one spouse paying into retirement during that time.This can include Social Security, and it is important to have retirement savings in addition to the amount you will receive from Social Security.

However, it is best if you continue to contribute to retirement accounts for both spouses. This will help the stay-at-home parent in the event that the working parent becomes disabled, if there is a divorce or a death. The retirement savings you contribute while you stay at home will make it easier to reach your overall retirement savings goals. Planning for retirement is just one aspect of a solid family financial plan, you may want to consult with a financial planner to make sure everything is on track.

Retirement Savings Options for Stay at Home Parents

According to the law you cannot contribute to an IRA unless you are working. However, if you are married you are allowed to open a spousal IRA if one person is staying home and not earning an income. The income contribution limits are currently the same as the other IRA options. You can also open either at traditional IRA or a Roth IRA as part of the plan. You can open the IRA at a brokerage house and set up an automatic monthly contribution or you can set it up at your local bank or credit union.

Finding Money for Retirement

If you are making a lot of financial sacrifices to be home with your children, you may be struggling to find money to contribute to retirement on a regular basis. If this is the case you may want to think about ways that you can earn money to put towards retirement. Some women plan on just taking a few years off until all of their children are in school full time and then kicking up retirement contributions then, but if you space your children a few years apart and have more than one you may be out of the workforce for more than ten years and that is a lot of time to lose on retirement contributions.

Additionally you may find that your expenses go up as your children grow up and it may still be difficult to find the extra money you need to put towards retirement. Even if you cannot contribute very much each month, regularly contributing at least $100.00 a month will make it easier to reach your retirement goals.

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