Stay at home parent retirement planning?

Submitted by flowerssmellnice t3_zzuq4c in personalfinance

I’m 3 years into being a stay at home parent. I have no retirement account and it looks like I need to have earned income to contribute to one. What my best bet for saving for retirement starting now? I’m 31 and feel late to the game. My husband says he saves for us both but it makes me nervous to have none in my name. What are some good options for me? I don’t see myself working for at least another 3 years.

Other info: -We’re in our 30s -Husband makes a good income (above $130k) -We have 2 young kids with one in part-time care($700/month) -We own our car -We own a home and pay our mortgage ($2100) each month -We use credit cards and pay them off each month -Student loans are paid off -We have $25k savings -I have a college degree

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DeluxeXL t1_j2dmytj wrote

> Other info: -We’re in our 30s -Husband makes a good income (above $130k)

If you file jointly, you can contribute the max amount to your traditional or Roth IRA.

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flowerssmellnice OP t1_j2dnc70 wrote

I don’t have one of those. How might I open one? Is it too late for this year?

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DeluxeXL t1_j2dnjyy wrote

You can open and contribute for 2022 until tax day (4/18/2023). This is true for every year - you always have 3.5 extra months to contribute after the year is over. Read the IRA wiki.

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mrbrsman t1_j2dnpbv wrote

Yes, you can still open one for this year and you can contribute for 2022 until April 15th 2023.

I recommend one of the big brokerages (fidelity, vanguard, Schwab) or the same that your husband uses.

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Smokey_Katt t1_j2dpxr3 wrote

You need 40 quarters with some taxable income to qualify for Medicare on your own. That’s a good goal to shoot for, it’s pretty easy to work a few hours a week someplace low-stress.

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flowerssmellnice OP t1_j2dzm22 wrote

Thank you. I worked for 8 years before kids and need 2 more to qualify, which I do plan to do at some point

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Fpaau2 t1_j2f55bl wrote

What is the main wage earner has over 40 quarters of wages? Will the spouse qualify for Medicare? And SS?

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Smokey_Katt t1_j2f85pe wrote

Yes but I’m not sure if the details. I know there are “married for 10 years” rules etc.

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93195 t1_j2dr7md wrote

You can/should use household income to open and fund your IRA. Your spouse’s income counts.

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crryder25 t1_j2dv09i wrote

My spouse is a stay at home parent and we each have a Roth IRA and we contribute the max to each annually. 2022 max is 6,000 per account (12k)and 2023 bumps up to 6,500 (13k total)

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flowerssmellnice OP t1_j2dzs67 wrote

Do you do this manually or as some kind of direct transfer from a paycheck?

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DeluxeXL t1_j2e1b63 wrote

You should do it from the IRA provider -- have the IRA provider pull money from your checking account.

If you direct deposit into an IRA and the employer messes up the deposit, they'll also cause unnecessary tax problems for your IRA as well.

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sandra426 t1_j2do4mt wrote

Contribute $500 per month or max $6000 per year to a Roth IRA. You can still contribute for 2022 until April 15, 2023. You can contribute to a Roth IRA under your husbands income. You cannot contribute to a traditional IRA because you yourself have no earned income. You can do this at a bank or online or at a financial advisement company. Rates will vary but are generally very low for this. You can also make an appt w a fiduciary advisor at a bank or elsewhere. This will be free.

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DeluxeXL t1_j2dttta wrote

> You cannot contribute to a traditional IRA because you yourself have no earned income.

This is wrong. Each spouse can contribute to traditional or Roth IRA as long as the joint taxable compensation (W-2 from both spouses combined) exceed the contributions.

If OP contributes to traditional IRA, the tax deduction reduces the joint income as well.

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flowerssmellnice OP t1_j2dp8qg wrote

So can wewe contribute $12k/year since it is joint? My husband already maxes out his contribution

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bros402 t1_j2dtdr2 wrote

You can put 6k in yours, he can put 6k in his

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sandra426 t1_j2dpr6e wrote

My understanding is that he can max out his 401K or traditional IRA contribution and then you can each contribute $6000 for a total of $12K/year to a Roth IRA. BTW, if you were to split up, you would be entitled to half of his 401K earnings since you didn’t work during the marriage.

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bowoodchintz t1_j2e3lyt wrote

He can max out his 401(k) AND ( not or) an IRA, AND she can max her own IRA, also known as a spousal IRA, for a total of $12,000 in combined IRA contributions.

Also, she would not be automatically entitled to half of his 401k earnings in a divorce. I’ve noticed you are giving advice that is incorrect, more than once. Please consider deleting or editing your comments, they could negatively impact others, and perpetuate poor understanding of personal finance.

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sandra426 t1_j2dpwa9 wrote

And try not to think of the Roth IRA as joint. All IRAs are individual accounts.

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NealG647 t1_j2fp327 wrote

I used to "save enough for both of us" until I finally maxed out my annual contribution limits, then I had my spouse begin saving/investing on our behalf too. By that time, they had gone back to work and had income of their own.

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Grouchy-Intention-44 t1_j2efdly wrote

Why is a child in daycare if you’re a stay at home parent? Once they grown up you’ll be working and putting money into a 401k also

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Bird_Brain4101112 t1_j2ejmjr wrote

Get a part time job at least to ease back into the workforce.

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