5 Retirement Planning Tips for the Stay at Home Parent

As a stay-at-home dad or mom, you may think you do not have to worry about retirement planning, however, this is far from the case. Even if you aren’t making a steady income this does not mean that you shouldn’t plan ahead for a secure retirement. It is important that as a stay-at-home parent you know your options. By law you are unable to contribute to an IRA if you are not working but if you are married than you can open up a spousal IRA as a stay-at-home mom or dad. This account has the same limit as a traditional IRA account. Whether you are preparing to stay out of the workforce forever or for a few years, by following these tips to effectively plan for your retirement as a stay-at-home parent you can ensure financial stability during your golden years.

Ensure That Both Parents are on the Same Page 

Retirement planning is something that both parents need to discuss and understand. Having your partner’s support is crucial to a successful retirement. It is a good idea to take into consideration the financial implications of being a stay-at-home parent and what affect it will have on your retirement goals.

Look at Your Spending

It’s critical to know exactly where your family’s income is going every month. Nobody wants to have to budget, but as a stay-at-home parent it may be as important as ever to save money in order to have a secure retirement. Between debit card, credit card and bank statements you should figure out a realistic budget to stick to in order to have money left over in order to plan your retirement.

Fix Your Spending Habits

Being a stay-at-home parent means that you may have to make some sacrifices in order to save for retirement. If you need to adjust your spending in order to save then do it immediately. You can start with conveniences and luxury items. Look at cutting back on your premium TV or your regular Starbucks trips. Remember to put the money that you save on cutting back into a retirement fund.

Finding Money to Retire

If you find that you are making extremely difficult financial sacrifices in order to stay home with your children than you may want to consider looking for ways to earn money in order to contribute to your retirement fund. Also keep in mind that as your kids grow up, their expenses are going to increase as well so you may find it very tricky to save for retirement in the coming years without a secondary source of income. Just because you stay at home taking care of your kids does not mean that you can’t make money at the same time. If you are struggling to save money for your retirement then you may want to consider working at home. There are many ways to do this from being an independent contractor to operating your own business. In fact, in this day and age being a stay-at-home mom or dad is commonly synonymous with being a work-at-home mom or dad. Working from home will allow you to more effectively plan for your retirement. Being self-employed will allow you to qualify for plenty of retirement accounts such as the Solo 401(k) and the SEP IRA.

Don’t Forget About Your Spouse

As a stay-at-home parent you can ensure that your spouse is maximizing his or her contributions into a retirement fund. If they are not then it could make sense to up your deferrals so that both of you can save as much as you can for retirement.

Finances - 25 Jul, 2014 - No Comments