When people work outside of the home, not only are they making a consistent financial income, but they may also have access to investments and retirement options that people who work within the home don’t have. So if you’re someone who is a stay-at-home parent, it’s important that you think ahead about your finances in retirement so that you don’t wind up living in a senior living community wondering how you’re going to provide for yourself for the next phase of your life.
To help you learn how this can be done, here are three tips for preparing for retirement as a stay-at-home parent.
Work Toward A Retirement Savings Goal
Because both you and your spouse are going to need to live off of your retirement funds once you choose to retire, you’ll need to come up with a retirement goal that you can both work towards. Whether you choose to think about this as one sum or as two separate goals, you can’t know how close you are to reaching your goals if they aren’t explicitly stated. So as you prepare to start saving for your retirement, make sure you know what your goal is so that you can see your progress along the way.
Open Up Your Own Spousal IRA
One great option for someone working as a stay-at-home parent who isn’t bringing in an income on their own but still needs to prepare for retirement is to open up a spousal IRA.
A spousal IRA allows someone who isn’t making an income to contribute to an IRA retirement account. This way, in addition to contributing to a retirement account for your spouse, you can also have your own retirement account in your own name that you’re able to contribute to.
Depending on your tax situation, you can choose if you want to open up a Roth IRA or a traditional IRA. But either way, having your own account that you can put money toward each month or year will help you to grow your own retirement funds.
Contribute More To Your Spouse’s 401(k)
If your spouse works while you stay at home raising your children, something else that you can do is look into the retirement options through your spouse’s employer and then maximize those retirement benefits.
For example, if your spouse has a 401(k) retirement account through their employer and the employer will match a certain contribution, it’s going to be best for your family to contribute as much as possible to take advantage of this employer match. This way, you and your spouse can save the maximum amount toward your shared retirement accounts.
If you’re a stay-at-home parent and you want to be sure that you’re financially prepared for retirement when the time comes, consider using the tips mentioned above to help you make a plan.