What is your plan for retirement? I have been thinking about this a lot because I have a friend that is mid-40s. Kids are teens/young adults. She believes in traditional marriage roles as has not worked very much outside of the home and so I know that she does not have the Social Security credits. But also, her husband does not like to work a traditional W-2 and is currently day trading and is making her huge promises of wealth. I’m pretty sure all of her eggs are in that basket and I worry what happens when she is retirement age and the windfall never came.
Anyway, her situation is unique. But you considered what you will do? Have you discussed it with your spouse that is the primary income earner? Do you have investments/savings in your name? Do you have a plan?
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She can open a Roth IRA and max it out each year (7K). This way she at least has her own independent retirement account that is separate and apart from her husband. I’m not sure how her status as a SAHM might affect that though. I vaguely remember reading that it needs to be income, but it’s worth looking into. At the very least, she can open a brokerage account and buy ETF stocks (VTI is pretty solid) so she has something that’s hers. That’s a long game though. Its for future financial stability (not current).
Is she legally married to him? The women I’ve seen get screwed over are usually not legally married. Living together is not enough.
My husband is a SAHD. He has some work from pre-kids and just went back to work although not in a high paying job.
I have fully funded a spousal Roth IRA for him every year. Now that he’s back in the workforce (kids are teens), he maxes out his workplace retirement (which means bus paychecks are effectively zero $) so he will have those two things should everything else go sideways.
I’m not a SAHM yet, but this has been a conversation coming up a lot since I got pregnant now and have a child with a condition that will need a lot of care in the long term.
I currently work in corporate full time earning as a top 20% in my country. Have my own savings, we co own a house that’s almost fully paid up, and he pays for everything at home (groceries, food, home renovation etc) besides the internet, electric & water bills and monthly estate conservancy fees which we share. He also pays for our dates, hospital check ups for the baby and cab fares. I have a lot of savings because of this. I am currently just holding out at my job to earn enough in case our baby’s hospital bills hit the roof, we don’t know the final cost yet and how long he will need to stay in the NICU. And if that goes fine, I’ll quit my job earlier and be a SAHM. But at the same time with my savings, I’ll use it to create my own business at home – a few apps to bring in passive money (already have a few ideas) – also so that we both can retire early. That’s somewhat the plan i have as an SAHM. Your friend should consider to not be over reliant on her partner, even if they are going to be together till old age – always good to earn your own keep for rainy days.
If he has the social security credits for retirement she can pull from that. The other option is a spousal IRA, but that is something she should have set up and started funding yesterday. Second best time is today
Umm… I don’t know that he has any. Also, I think she is very averse to work so if she did, I don’t know what she’d do.
We kept up my investments every year so i even if we got divorced, i would still have some money without any legal drama.
Their plan is their husband’s Social Security. That’s how traditional (1950s) marriage works in the US.
It is a bad plan.
Becoming a SAHM was something I discussed a lot with my husband before we both agreed to it. The big considerations for me were:
We have joint finances for everything. Every account has either both of our names or lists the other person as beneficiary. Every asset is in some sort of legal entity where we have joint ownership. My husband also has life insurance in case something happens to him. If we divorce, all assets will be split 50/50. My husband actually wanted an 80/20 split in my favor to make up for my career taking a hit. I vetoed him but it definitely made me feel safer knowing that he thought that way.
Are you worried that your friend will have no plan if her husband dies? Or that they are going to get a divorce? Because otherwise it would be better to approach it without the SAHM factor. There is spousal social security and retirement account can be split in a divorce. Having spouses not be on the same page financially or having a spouse that’s bad with money are both issues that pop up when both spouses work too.
Healthy retirement savings, just like anyone else’s plan. My husband maxes out his 401k and we also have other investments.
This is why I would never become a SAHM without an income for more then a few years. To each their own but that looks like a great way to get screwed over later in life.
My husband is a stay at home husband for health reasons and we don’t have the option to sink money into private pension (they aren’t a great deal anyways over here).
Tbh, since the retirement system in our country gets reduced less and less, we don’t even know if we will have the option of retirement/pension once we reach 67 (if that’s still the age for retirement then. Might get raised anyways).
He’ll get the poverty pension, and I will get my pension, and we will try to make it work.
Or maybe so far in the future there might be a basic income. Or the resource and climate wars will mean there’s bigger issues than pension. We just don’t know. But looking at the start of resource wars in Europe and knowing it will only get worse once climate change hits more…. Not very optimistic.
My husband always said it doesn’t help to worry about things we can’t change. We will do our best to survive off the money we’ll get then (if any), and will try to invest once our home is renovated.