Stay-At-Home Parents Need To Save For Retirement Too
According to the Transamerica Center for Retirement Studies, 90% of stay-at-home parents are married, cohabitating, or in some sort of partnership. Of all stay-at-home parents, around half do not have any sort of financial retirement savings in place.
A fairly simple way to get on track with saving for retirement is to fund a “spousal IRA”. As the spouse of a worker or business owner with earned income a stay-at-home parent can fund up to $5,500 per year (or $6,500 if over age 50). Depending upon your tax status, you may be able to deduct the contribution on your income tax return. Also, make sure you are tapping into the full potential of your spouse’s employer plan. If your spouse is not maxing out contributions you may consider increasing them in order to make up for any retirement savings deficit for you.
It is common for stay-at-home spouses to feel vulnerable about their finances. Talk with your spouse about how you feel and your concerns. Consider working with a qualified financial advisor who can help you create a plan of action that takes into account your total household goals and needs.
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