What Are You Moms ( Stay at Home Especially) Doing for a Savings Plan?

Updated on November 04, 2016
S.S. asks from Seattle, WA
15 answers

Hi moms,
I wanted to look into savings plan for the future and I am a stay at home mom. I know of 401k plans , when I use to work. What are some options now for savings /annuities? What are some thoughts on this?

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answers from Washington DC on

I suggest you look into a Roth IRA. A financial planner could explain it better than I, but in general, you pay taxes now and there are no tax implications later. I think you can withdraw anytime, also. A traditional IRA is just the opposite. There are income limits and contribution limits for a Roth, as well.

3 moms found this helpful

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answers from Boston on

For most couples, your best bet is to start with 401(k) plans for whomever is working and max out those contributions if you can. The annual contribution limit is $18,000. Very few people actually hit that max. If your husband has hit that max then congratulations! Your next step would then be to max out IRAs for both of you, either traditional or Roth.

The reason that a 401(k) is the best place to start is that typically, plans offer a company match on a portion of the contribution (free money, yay!), contributions are tax free, and your employer's buying power means that you can invest in high-quality investments with lower expenses than you would pay if you were to invest on your own in an IRA or brokerage account. Make sure that you or your family's trust is listed as the beneficiary. If you were to divorce, you would be entitled to half of the contributions and earnings from during your marriage. To be honest, I work in benefits administration and a lot of plans don't require spousal consent for withdrawals so we have seen cases where a spouse had drained an account prior to filing for divorce and the other spouse has been unable to recover those funds but those cases are few and far between.

College savings plans are another good savings vehicle, especially 529 plans for either savings or pre-paid tuition.

Annuities can be good investment choices for when you are nearing retirement and are starting to live on the income that you've saved. As you and your spouse get within 10 years of retirement, it would make sense to hire a financial planner who can look at your assets and map out what you'll do leading up to and into retirement to maximize and protect your savings. Then check in 5 years out, and annually as you approach retirement to make sure that you plan is on track. My dad retired in 2011 and during the financial crisis of 2008 he was pretty shaken but having a trusted advisor who already knew my parents, their situation and goals was really helpful in minimizing their losses and then getting back into the market quickly when things stabilized. He was able to retire on schedule despite the recession.

7 moms found this helpful


answers from Dallas on

I applaud you for thinking in this direction. SO many people don't plan and then end up in trouble.

There are many options available and it's important that you choose the best options that consider tax ramifications as well.

We were big planners and my husband was brilliant with ideas and investing, however we still made sure we have a financial advisor who can guide us best.

Per my experience, my husband died suddenly in 2015, I am limited as to what I can touch right now without taking a major tax hit because I am not 59 1/2. Although we never expected for him or me to die suddenly, we did have our accounts set up with options in the event the unthinkable happened. So far I've not taken anything because I've been able to continue running our company on my own taking both salaries. In the event I was not able to do this, things were in place so that we would be ok. So, things that are in place are continuing to grow. Thankfully, I was able to Max out on myself and daughter's 401k as well for 2016 and I know he'd be proud of me for that alone this year.

I appreciate the planning and preparation my husband did daily. He really took care of us and was very unselfish. Because if his planning, it is one major issue I don't have to worry about during this time of grieving and keeping everything together.

5 moms found this helpful


answers from San Francisco on

When I was a SAHM my husband funded both of our retirements. You'd better believe if he didn't I would have gone back to work in a heartbeat. It was a combination of stocks and mutual funds. Now I have mostly have preferred stocks and some money market funds.

5 moms found this helpful


answers from St. Louis on

You would be amazed how much your husband can put in his 401k. I would say maximize that because it is one of the few assets he can't hide from you, take from you, regardless of anything that money is yours

4 moms found this helpful


answers from Jacksonville on

JB gave excellent advice. Although, I would still check with a financial planner. It might be that you'd be better in the end to contribute enough to get all matching funds from husband's employer in the 401K, and put some of the rest (above what would be matched) in a Roth IRA. There are tax implications that might be at issue when retirement age actually arrives. Roth's are after-tax monies... so the tax implications at withdrawal are different than for a 401K. And as Michelle mentioned, Roths are different in your ability to withdraw early than a traditional IRA. However, it is not true that you can withdraw whatever you want at any time without consequences. You can only withdraw your basis (what you paid in). Any earnings above that cost basis cannot be touched without fees/penalty. But, it's still the preferred vehicle, b/c you do have access to what you paid in, at any time (I think after the first few years...there is a minimum time from the opening of the IRA that you can't touch it, if I recall correctly.)

Also, don't overlook the need for life insurance policies on your spouse and yourself. Not necessarily as investment vehicles, but as exactly what they should be: insurance against loss of income. As a SAHM, if you die, your spouse may have to pay someone to do all the things you currently do. Cost of a full time nanny for your kids? annually for how many years? And a maid? Be sure that YOU are insured. And also be sure that any medica/retirement benefits your spouse receives through his employment can be continued should he die and you survive.

I know a couple who declined the survivor benefit on the husband's retirement so as to get the maximum payment benefit in retirement income. He retired, and now, should anything happen to him, not only is his retirement gone, but so is her insurance. They didn't understand it. Yes, they would have received a lessor amount of retirement benefits (monthly pay), but if he dies, she would still receive it, along with medical. Now, not so for them. You could offset this with adequate life insurance provisions. So be sure you understand all the scenarios and plan for possibilities, however unpleasant to contemplate.

3 moms found this helpful


answers from Norfolk on

Talk to a financial planner.
There are many IRAs to choose from.

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answers from New York on

I opened a traditional IRA through Fidelity some years ago. I am not a SAHM, but I was self-employed for years and my current employer does not offer a retirement plan. I opened one that if I had automatic deductions of at least $200/mo directly from my bank account, took eletronic statements instead of paper, and managed my own account/investments (which I just picked a fund - I actually don't have to "manage" it), they would not charge me any fees. So basically I can invest for free! I'm not investment savvy AT ALL but I have managed to nearly double my investment and got brave enough to open a QTP for my grandbaby the month she was born and that account has tripled :) Now after the election, I might be in trouble . . . Anyways, my contributions are a front page tax deduction for us, which is not as valuable as my husband's pretax contributions to his deferred comp, but as our tax base changes in the future, the "tax value" of what I am doing may change. Plus, you are lowering your AGI, which can help with other things (but it doesn't lower your MAGI, so depending on what it is, it may not matter).

Good luck!

1 mom found this helpful


answers from Santa Fe on

We put as much as we can each month into my husband's defined contribution 403b (like a 401k). They match what we put in and we try to save heavily each month. We also have Roth IRAs for both of us. I have my small retirement account from when I worked for Fish and Game. And there is social security.

1 mom found this helpful


answers from Beaumont on

We work on a strict budget that takes every expense into account. I also recommend banking at a credit union. They allowed us to open several "savings" accounts that allow us to save larger amounts of money for taxes, vacation, Christmas etc. Money comes out automatically and I actually only have 2 or 3 bills that I pay each month. All else is on autopilot.

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answers from Pittsburgh on

The obvious alternative to a 401k is an IRA, unless you are above the income limits.


answers from Chicago on

What are your goals? Saving for retirement? Saving to go back to school? Having an emergency fund of your own?

I got married later in life and I saw enough marriages end to be very cautious about finances. I have a separate checking account from my DH and a separate credit card (we also have those jointly.) I wanted to make sure that in case he decided to find himself with a 23 year old, I wouldn't be chasing him around the courts for living expenses.

I'm self-employed so I have a SEP and a traditional IRA that was started during my corporate days.

My "best" advice: Have an automatic deduction from your checking account...even if it is $25.00 a week. I'm not a heavy spender, but I do know that I would never find ways to budget aggressively if I didn't know that I had that automatic deduction each month.

I don't think it is so much how you save, than if you save. And, the automatic deduction makes that mandatory for me.


answers from New York on

Roth IRA's.
Basic. Safest. Best.
Just my .02 cents


answers from Springfield on

while living paycheck to paycheck with nothing left after all the bills are paid.. we have no plan, we have no savings. when something big happens we go into debt.
i know i have a decent inhritance comming in the next 10 years and have talked to an advisor about how to invest that inheritance that i may save it and use it to possibly get more savings from it.
horrid plan i know, but when there is no money left to be saved ua gotta do what ya gotta do.


answers from Washington DC on

we have my husband's 401K at work and also contribute to an IRA.

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