Being a stay-at-home parent is a rewarding choice. Still, it often comes with financial challenges, including planning for retirement. As a stay-at-home parent, adopting intelligent financial strategies that can pave the way for a secure retirement is crucial. In this article, we will explore practical steps to help stay-at-home parents in their thirties save for retirement and build a solid financial foundation for the future.
The first step is getting on the same page with your partner. Communicating is a critical step. Couples must iron out their goals and speak openly about their financial situation. Once the end destination is decided, you can draw a game plan to move forward. Couples need to discuss retirement plans as they transition from both spouses working to one solely raising children. Too often, couples have one spouse that stops saving money towards retirement to focus on raising kids, but they don’t adjust their contributions to retirement savings or update their expectations on what retirement may look like.
If you want to learn how to communicate with your spouse properly, check out this article, The Conversation Every Couple Needs To Have
The best-case scenario is that each spouse maxes out contributions to all available retirement accounts. For those that are less well-off, couples need to decide what types of retirement accounts to use and whose name will be on them. For example, the spouse with a formal job saves for both of them in their work retirement account, or the couple may choose to save in the spouse’s work retirement account and the other spouse’s IRA.
When would they like to retire? What retirement looks like to each individual? Then what retirement looks like together? Now you need to determine how much money you’ll need for retirement based on your desired lifestyle and estimated expenses. Consider factors such as healthcare costs, inflation, and other potential expenditures. This will help you establish a target for your retirement savings. Working with a professional can make sure you get the most individualized results. However, there are calculators that can help you get pretty good results.
Consider retirement account options, such as an Individual Retirement Account (IRA) or a 401(k) if your spouse is employed. These accounts offer tax advantages and can help your retirement savings grow over time. Choose the type of IRA that suits your needs, whether a traditional IRA or a Roth IRA and contribute regularly.
Yes, stay-at-home parents in their thirties can save for retirement in their own accounts. Eligibility to usually contribute to an IRA depends on whether you have earned income, but for married couples, the spouse that isn’t working is eligible through their spouse who has earned income from an employer.
You may be wondering where to open up such an account. Picking out a company for your IRA is similar to grocery shopping. You may be able to find a tomato at every grocery store, but there are differences in stores; you may find different customer service levels, a more convenient website, or better educational materials. It can be hard to see the right fit up front, so know you can easily move your IRA to another firm if need be.
When investing for retirement, consider diversifying your portfolio to manage risk effectively. Explore various investment options, such as index funds, mutual funds, and exchange-traded funds (ETFs), which can provide broad market exposure at a relatively low cost. Educate yourself about investment strategies and consult a virtual financial advisor for personalized guidance. An essential tip to remember is that you should be adjusting investments over time. As you get closer to your retirement, it is typical to get more conservative with the risk level of your investments. When you are in your thirties, you need to be careful about being too conservative with your investments. You may be risk-averse, and the thought of losing money doesn’t sit well with you, but it may also reduce the chance of your money growing correctly. In turn, this means either you have to retire later or contribute more than usual.
Set up automatic contributions to your retirement accounts. By automating your savings, you remove the temptation to spend the money elsewhere and establish a consistent savings habit. Regular contributions will help your retirement nest egg grow steadily over time.
Stay-at-home parents in their thirties saving for retirement can be challenging to find the money. Typically, it feels like more and more money is going out the door to your kids. However, in the digital age, stay-at-home parents have numerous opportunities to earn income from home. Explore flexible work options, such as freelancing, consulting, or remote part-time jobs that align with your skills and schedule. The additional income can supplement your savings and accelerate your progress toward retirement goals. The gig economy is excellent for this. Now if you are a stay-at-home parent, you know how much work and energy goes into it. Working part-time may be a better option once the kids start attending school. Ideas to get you started on what side job may suit you; 10 Side Gigs You Can Do From Home
Revisit your retirement savings plan periodically to assess your progress and make necessary adjustments. Life circumstances change, and it’s essential to adapt your financial strategy accordingly. Any stay-at-home parent knows how adaptable and flexible you need to be, so remember to talk with your spouse about retirement savings as your financial situation changes. Review your investments, contribution amounts, and retirement goals to ensure you’re on track and aligned with your evolving needs.
A stay-at-home parent in their thirties saving for retirement must continuously educate themselves about personal finance and retirement planning or have a savvy spouse in this area. No matter who it is, if you are your own financial advisor, you should keep up with financial news, read books on investing and retirement, and follow reputable online resources. Empowering yourself with knowledge will enable you to make informed decisions about your retirement savings strategy.
As a stay-at-home parent in your thirties, saving for retirement is a critical step toward achieving long-term financial security for yourself and your family. Maximizing contributions, diversifying investments, and staying informed about personal finances will keep your family on track.
Often, retirement planning is as much about behaviors, so remember to maintain consistent contributions and cool your head with market downturns by sticking to long-term strategies.
By taking proactive steps and staying committed to your retirement savings goals, you can overcome the challenges of being a millennial stay-at-home parent and build a solid financial foundation for a comfortable and secure retirement. Start today and pave the way for a brighter future.
If you require further help, feel free to set up a time to chat quickly about your situation with a virtual financial advisor at BlackBird Finance. Here’s a link to take the first step.