How to Save for Retirement as a Stay At Home Mom

retirement plan sahm

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How on Earth do you save for retirement as a stay at home mom?? 

Planning for retirement as an employee in the US is pretty straightforward. You do the paperwork that HR gives you, you work, and then one day you retire with a hefty 401k to see you through the rest of your life. 

Things get a little more hairy if you decide to opt out of the workforce.

Many stay-at-home moms (and some dads) worry about how they will contribute to retirement without taking part in the traditional workforce. 

I was certainly one of these women.  

Although I worked for my entire adult life until I became pregnant at 26, only one of those jobs had ever provided me with a 401k. 

The majority of my jobs were with small businesses who offered no health or retirement benefits at all.  

By the time my son turned a year old, I realized that I really didn't have much in the way of my own retirement plan at all. 

Of course, my husband did through almost all of the jobs he has worked as an adult. 

how to save for retirement stay at home mom-min

Even Married Women Should Have Their Own Retirement Funds

If you are married, the good news is that retirement plans are meant to be shared. A couple that fully funds a 401k and possibly an IRA as well each year of their working life should have more than enough money to support two people in retirement.

But as we all know, nothing is guaranteed in life. Sometimes the primary income earner passes away earlier than expected, leaving many years of potential retirement growth on the table. Sometimes couples get divorced, and splitting up assets like 401ks can get messy. 

In an ideal world, I think that both spouses in a marriage should each have their own retirement plan that they are contributing to. The best case scenario is that they live long and stay happily married to enjoy the fruits of their labor in retirement.

If a divorce or early death were to happen, however, the stay at home spouse would still be prepared at retirement age. 


How Can Stay at Home Moms Best Prepare for Retirement?

The solution isn't quite as simple as letting your employer do the paperwork and 401k transfers for you, but thankfully there are some options in place that can really benefit stay at home mothers. 

As you read through these options, it will become apparent pretty quickly that being married is a huge benefit to planning your retirement as a stay at home mom. We'll talk about the options for single women too, but it's something to keep in mind. 

retire stay at home mom

1. Embrace the Spousal IRA

The first and likely simplest retirement plan for stay-at-home moms is the spousal IRA.  

If you don't know much about IRAs, that's okay! An IRA is simply a tax advantaged retirement account that puts your money into the stock market to grow until you reach retirement age. 

IRAs typically come with the stipulation that the money you put in must be earned income. Thankfully, there is a bit of a loophole for spousal IRAs. 

A spousal IRA allows a stay-at-home wife (or husband) to open an IRA in their name, but use household money that their spouse earned to fund it.  

As of 2019, a woman under the age of 50 can contribute $6,000 per year to their IRA. That number goes up just a bit if you are over 50.  

So let's do the math here.  

Let's say that you are 28 years old, and you have nothing saved for retirement at this point. You decide to start fully funding your IRA at $6,000 per year. (Keep in mind, the government increases these limits each year, but for simplicity’s sake we’ll keep this number the same.) 

At a standard 7% yearly return, you could expect to retire with $1,029,366 at age 65. That's pretty good for only investing $500 per month! 

Of course, this figure only takes into account your contributions. If you are married at the time of retirement, you will also still have the benefit of your spouse’s retirement plan as well.  

There is some fine print you need to know about a spousal IRA to take advantage of its benefits: 

sahm retirement


3. Social Security for Stay-At-Home Moms 

I'll be the first to tell you that you should not rely on social security alone for your retirement income, whether you are employed or not. The amount you receive will almost never be enough to live on. You really need a backup plan.  

That being said, social security can contribute to your retirement income. 

Like I mentioned earlier, marriage is really favored here. Stay at home spouses are eligible for 50% of their working spouse’s social security payments, and this doesn't impact how much the working spouse can take.  

If you spent at least 10 years in the workforce, you likely will have your own social security benefits you can also draw on that are separate from what you get from your spouse. 

Will I still have retirement funds if I get divorced from my working spouse?  

One reason I feel so strongly that stay at home moms should have their own retirement plans is in the case of divorce. 

Of course, in most no-fault states you will be eligible to receive some of your spouse’s retirement plan. You could then reinvest this money to prepare for your future retirement.  

Reality sometimes looks a bit different than what a piece of paper does, however. Some women find themselves in a position where fighting for part of their husband's retirement plan would put their children through even more stress then walking away with nothing.  

This is certainly one of those hidden penalties to divorce that can be avoided by having your own retirement plan in place. 


Why We Should Plan for Independence and a Good Marriage Simultaneously 

None of us truly know whether our marriages will work out in the long run. In a perfect world we both do our best to protect and build up our marriages, and we also plan for the worst case scenario. 

For women in particular, it's so important to be prepared if things were to go sideways. We are often the ones who will continue to care for our children primarily after a separation, and we are usually the ones who will end up caring for aging family members at the same time.  

So how can you prepare for your future no matter what happens? 

First, make sure you have a good life insurance policy. Ideally you should purchase life insurance for both spouses in case something were to happen to one of them. If you have children, this is even more important for making sure you can provide for them.  

My second tip is to make sure you have a credit card in your name. In a serious situation, having your own credit card allows you to do what you need to do to protect yourself and your kids.  

Lastly, I always recommend that women have some savings in a bank account that is in their name only. This need not be a secret from your spouse! Enough savings for a cross-country drive, a deposit on an apartment, and a few groceries is a wise idea.  

retire stay at home mom



Although staying home with your children may decrease your lifetime earnings (although not always!), there are still several great ways to keep your retirement plan intact while you raise your crumb cruisers.  

Here are my recommendations for retirement investing as a SAHM:  

  • Open a spousal IRA 
  • Start a business and contribute to a Solo 401k 
  • Treat social security income like icing on the cake  

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