Retirement planning for stay at home moms

As a Stay At Home Mom, you might not have given a thought to your retirement. After all, it seems a long way down the road yet, doesn't it? Many years before you will need to start even thinking about retiring. Besides, since you don't have a regular job, how can you have a retirement plan?

You can have a retirement plan as a stay at home mom, and you need a retirement plan! Hard though it may be to imagine, the time will come when the children will all be grown and gone, and sooner or later you will be ready to retire. You might be planning on joining or re-joining the work force after the kids all leave the nest, and figure you can worry about a retirement plan then. But why wait that long to prepare for your future? True, if you take a job when the kids are all grown that offers retirement benefits, that will be nice. But in the meantime, don't let these years go by, when you are staying home, without making an investment in your future by having some sort of retirement plan.

One very attractive possibility for you to consider is a "Spousal IRA." Don't let the word spousal discourage you from looking into this. A Spousal IRA is still just that: An Individual Retirement Account. So your spousal IRA will be yours. The only real difference between a spousal IRA and an everyday, run-of-the-mill IRA is that your husband's income is calculated to make the determination as to whether or not money may be added to your Spousal IRA. Your Spousal IRA works exactly the same as your husband's. Any and all rules and benefits work the same as for a traditional IRA. Remember, you will own the IRA. Any and all assets in your Spousal IRA are yours, and yours alone. It will be in your name only!

To qualify for a Spousal IRA, it is necessary to file a joint income tax return with your spouse. The maximum amount you can contribute to an IRA is $5,000. This also applies to a Spousal IRA. For instance, if you and your spouse each want an IRA, you may each contribute $5000 apiece, as long as your husband has an earned income over $10,000 per year.

If this doesn't appeal to you, you might think about investing in a retirement annuity. Various plans, to fit any budget, are available. Typically, a retirement annuity is purchased through an insurance company. The insurance company is then your "custodian." The major difference between an IRA and an individual retirement annuity is that with an IRA, your contributions may be invested in whichever alternatives are available through your account custodian, whereas your contributions will only go into a variable or fixed annuity that is offered by the "custodian" insurance company.

Whichever retirement plan you decide on---do make getting something in place a top priority! In a perfect world, you would be accruing Social Security credits for the years spent at home with your children. Sadly, at present that is not the case. So, unless and until this situation is rectified and SAHMs receive similar benefits to any other worker, it is up to you to make sure you prepare for your retirement.