Stay At Home Parents Need Retirement Savings Too
If you’re a stay at home mom or dad, did you know that you can still be contributing to your own retirement account?
Even if you aren’t currently employed (which is debatable, really, because raising kids is a very difficult job), you and your spouse can file a joint tax return. Then as long as your spouse’s income is within the limits set by the IRS, you too are eligible to contribute to a Traditional or Roth IRA account.
Okay, so you’re technically unemployed, but you earn a little bit here and there from blogging, babysitting the neighbor’s kids, or (though who has this nowadays, I don’t know) you might just have some cash burning a hole in your pocket. It’s not too late to start a little nest egg for yourself!
For those worried about possible tax penalties and liquidity just in case you need that money sooner than retirement, look into opening a Roth IRA if you and your spouse’s total combined income is less than $176,000. (2010 guidelines)
Even if the stay at home spouse does not make any income, you can still put money into an IRA – this is considered to be a spousal IRA. If the stay at home parent makes more than $5000, consider setting up your own retirement plan. You can save quite a lot of taxes by transferring your income from one tax category to another. (Kim Luu)