? for SAHMs re: Retirement, Savings, etc.

[freckles and boo]

I worked and put the max into a 401(k) for six years before my older daughter was born. My company matched 50 cents on the dollar so it grew nicely. Because I knew I wasn't going back to work anytime soon I rolled it into an IRA. I freelance a bit each year and I continue to contribute a couple thousand each year. My husband has a 401(k) and an IRA, plus he inherited what was left of his father's IRA. We also have 529 plans, savings accounts, and taxable brokerage accounts for each girl. We plan to finance four years at a state university and anything above and beyond that they will have to pay for themselves. The way we do this is by living well below our means and not buying stuff we just don't need. We don't stay at deluxe hotels, we don't buy expensive clothes, we don't eat out a lot. It really isn't a sacrifice. We still do fun things and enjoy our lives.

 

[mrsltg]

I do maintain a separate IRA - we both have one in our own names, and they are funded equally. Neither of us have 401Ks - I was never at a job long enough (yay military wife!) and we don't see much benefit to the military retirement plan because they don't match contributions. (I don't think. I could be wrong.) We are counting on the military pension as well, and I remind DH on every anniversary that I only have to be married to him for ten years to get half his retirement. (Halfway there this year! ) We do plan on fully funding college for our child(ren) as well and have started saving for that. I also plan on going back to work when the child(ren)are older. (Actually, I plan on writing novels and finding a publisher.....but that's more a dream than a plan. )

KEWL.... I do the same thing with Mike! Last anniversary was the magic seven years=50% pension!!!! I told him it was now time to renegotiate......

And, I'll read your books, too!

 

[Skatermom23]

SAHM of two teenagers checking in! I haven't worked since the oldest was born 16 years ago. At first it was a struggle but we had a plan and have stuck to it. Now DH is making pretty good money and we are able to catch up on savings. Everything is pretty well funded and under control. I struggle sometimes with the idea of going to work but realize I can't go fulltime and parttime just doesn't pay enough to be worth it, for us. Once the kids are off to college ( that we will pay for) DH still doesn't want me to work. He wants me to travel with him. He has the opportunity to travel a lot. So if we can continue to afford this, then that's what I will do.

To the poster who asked about divorce and retirement. All I can say is that I have never planned my life around the possibility of getting divorced. I do have a degree and could get a job if I needed to. Besides I handle all the money...DH would have to come to me and ask where everything is!!

 

[MindyLuvsMickey]

SAHM of our 2 year old DS. I'm completely out of the loop when it comes to finances (not good, I know) DH takes care of all of that stuff. DH makes really good money and can sustain our lifestyle on his own. Our retirement is well taken care of. I won't return to work until DS is little older, there's too much to miss. I will eventually return to the work force, but not necessarity in the capacity in which I was serving before. Not so sure I want to go back to teaching. The money I make will be put entirely into DS's college fund.

My family never had money growing up, so I financed my way through undergrad and graduate school. I don't want DS to have to deal with that. It's hard to start out life owing money for your education.

 

[NU2WDW]

I guess this kind of thing is always "in the eye of the beholder." We're comfortable but certainly don't lead any kind of extravagant lifestyle.
Bought our house 7 years ago (pre-kids, me still working) with the intention of paying for it with one income -- i.e., we aren't mortgage starved. Dh contributes max amount to 401K, I still have my IRA from before, we are looking into the federal tax deferrel college plan (can't remember the name of it) but expect our kids will be responsible for a substantial amount of their own college education, as I was nearly 100%. There's plenty of ways for them to do that. I've never understood why parents are expected to fund 4 or more years of their adult childrens' tuition.

My one question, though, is when it comes to retirement, for those of you who do not maintain an account, what happens in the event of divorce? Have you planned for a scenario like that? I ask because none of my good girlfriends are SAHM, so the SAHMs I am friendly with I am not close enough to to be able to ask. It's just always something I've been curious about.

This is just such a strange question to me. I've had other (working mom) gf's ask the same thing and I'm always like.... is this seriously something you think about to the extent that you plan your life around it?

Could we get a divorce? I suppose....? Could he die tomorrow? I guess so....? You can only "plan" for disasters so much. The two absolute certainties in my life are that a) I have young children and b) no amount of rationalizing on my part will convince me that spending 8+ hours a day outside the home is good for them. There is very little belt-tightening I wouldn't consider in order for them to have their mom around.

 

[katerkat]

I'll read your books, KK!

KEWL.... I do the same thing with Mike! Last anniversary was the magic seven years=50% pension!!!! I told him it was now time to renegotiate......

And, I'll read your books, too!

Thanks, you two! But they're not very good (yet.) And I haven't finished one (yet.)

And I'm jealous that you only have to put in seven years.

This is just such a strange question to me. I've had other (working mom) gf's ask the same thing and I'm always like.... is this seriously something you think about to the extent that you plan your life around it?

I'm not a working mom, but yes! I'm anal and I plan for everything - DH's death, divorce, etc. We are both very committed to our marriage - but a good number of marriages end in divorce, anyway. I like having a back-up "plan" (for everything, from daily life to long-term stuff) just in case. You should see my files on all the bases were could be assigned to next...

 

[meandtheguys2]

I guess this kind of thing is always "in the eye of the beholder." We're comfortable but certainly don't lead any kind of extravagant lifestyle.
Bought our house 7 years ago (pre-kids, me still working) with the intention of paying for it with one income -- i.e., we aren't mortgage starved. Dh contributes max amount to 401K, I still have my IRA from before, we are looking into the federal tax deferrel college plan (can't remember the name of it) but expect our kids will be responsible for a substantial amount of their own college education, as I was nearly 100%. There's plenty of ways for them to do that. I've never understood why parents are expected to fund 4 or more years of their adult childrens' tuition.



This is just such a strange question to me. I've had other (working mom) gf's ask the same thing and I'm always like.... is this seriously something you think about to the extent that you plan your life around it?

Could we get a divorce? I suppose....? Could he die tomorrow? I guess so....? You can only "plan" for disasters so much. The two absolute certainties in my life are that a) I have young children and b) no amount of rationalizing on my part will convince me that spending 8+ hours a day outside the home is good for them. There is very little belt-tightening I wouldn't consider in order for them to have their mom around.

Considering over 50% of marriages end up in divorce, I think it makes sense to realize that mine could too. My mom planned on being the wife of a doctor, putting him thru school on a nurses salary. That was not the life we lived.

As far as death, well, I'd be much better off shooting him... If he keels over, the kids and I can continue to thrive. If I keel over...same with him.

My husband respects what I do, and the worth I have in our home, just as I respect the work he does. Since no one is matching my salary as a homeschool mom we make sure that my IRA stays up to date!

Do we dwell on this stuff? Nah! We are having too much fun!

 

[mrsltg]

This is just such a strange question to me. I've had other (working mom) gf's ask the same thing and I'm always like.... is this seriously something you think about to the extent that you plan your life around it?

Could we get a divorce? I suppose....? Could he die tomorrow? I guess so....? You can only "plan" for disasters so much. The two absolute certainties in my life are that a) I have young children and b) no amount of rationalizing on my part will convince me that spending 8+ hours a day outside the home is good for them. There is very little belt-tightening I wouldn't consider in order for them to have their mom around.

I plan my life around the idea of living. I have my own retirement account because I am working, and why wouldn't I save that money? I also have life insurance for both my dh and myself and would hope sahm have the same. The unforeseen can happen and it's good to be prepared. I'm not planning on checking out tomorrow but it could happen and want dh to be able to be ok. I'm not planning on getting a divorce but I am prepared in case it does happen. I don't know why this is a strange question? Especially given the current divorce rate.

 

[beattyfamily]

To the poster who asked about divorce and retirement. All I can say is that I have never planned my life around the possibility of getting divorced. I do have a degree and could get a job if I needed to. Besides I handle all the money...DH would have to come to me and ask where everything is!!

ITA.

Although we have planned for death with insurance (LOTS of it as a matter of fact), we/I haven't lived my life planning for a possible divorce. Call me naive, but that just isn't how I think or want to think. I don't care what the % of marriages end in divorce these days. All I care about is my marriage and our relationship.

However, I do have 2 bank accounts that are in my name only that DH has no access to, so although those accounts weren't set up "in case of divorce", I do have that money to fall back on if I need to. I also have a degree to fall back on as well.

Its just not something I think about or worry about. To each their own though. If you (in general) want to worry/prepare for the possible divorce, go right ahead. More power to you. I just feel differently.

Regarding the OP, we also are saving for college and retirement and set a certain amount aside each month.

 

[DVCLiz]

This is such an interesting discussion - I hate to leave it. But I'M GOING TO DISNEY WORLD TODAY!!!!!!!!!! I'm picking DD13 up from school at lunch and we're driving to The Wilderness Lodge tonight!!!!! So I'll be gone a week and I'll look forward to reading more of your responses when I return.

 

[meandtheguys2]

This is such an interesting discussion - I hate to leave it. But I'M GOING TO DISNEY WORLD TODAY!!!!!!!!!! I'm picking DD13 up from school at lunch and we're driving to The Wilderness Lodge tonight!!!!! So I'll be gone a week and I'll look forward to reading more of your responses when I return.

witch... I mean, have fun!!

 

[NU2WDW]

I don't know why this is a strange question? Especially given the current divorce rate.

It's strange to me because it always seems to be used as a reason for a mom working, not a corollary. As in, "I'd like to be home with the kids but I work in case I get a divorce." (okay, obviously not that literal, but the reason behind it is there). To me, it would be strange to forgo the certain thing in life (my young kids need a parent at home) for something that's just a bad possibility. Since I'm married to a man who is divorced, I'm not naive to the potential, and I'm not saying nobody should have savings or what have you, I just can't see giving up the time when my kids are young "in case" later, down the road....

Re-reading my post, I can see how it might come across as being "anti" working mom, which I'm really not to the extent that the kids are truly being put first. My mom worked (though she waited til we were in school and then did nights). Some situations work out okay (split shifts, p/t a couple days a week while kids are at school, etc), I was responding to the 6am-6pm types. I know plenty of people who see their kids less than 2 or 3 waking hours a day, no exaggeration -- Then say "I'd stay home but we can't afford it".....when what they really mean is they'd stay home as long as they didn't have to give up any of their stuff. If you're in NoVA (near me) you know exactly the lifestyle I'm talking about. And of course they all imply that somehow we're "rich" because I stay home, when in reality we just choose to sacrifice things instead of time. It's all just a matter of priority IMO.

 

[beattyfamily]

This is such an interesting discussion - I hate to leave it. But I'M GOING TO DISNEY WORLD TODAY!!!!!!!!!! I'm picking DD13 up from school at lunch and we're driving to The Wilderness Lodge tonight!!!!! So I'll be gone a week and I'll look forward to reading more of your responses when I return.

Oh sure, start an interesting discussion and then bail on us!!

Have a GREAT time!

 

[KirstenB]

SAHM here. I worked until I was 36, so have a decent IRA acct. Ever since my first full time job after college, I maxed out the amt I could put in the acct. I worked my way through college, so no loans to pay back. Even when I worked, dh and I have always lived beneath our means. Not really on purpose, we both grew up in lower middle class families, so it doesn't take a lot to make us happy! Anyway, we do have savings for college for the kids, but it's not enough so I'll probably go back to work at some point to help close the gap.

It's smart for everyone, SAHM and WOHM to plan for the future. I know this thread focused on SAHMs and planning, but you could turn the discussion around, and ask WOHMs if they had to leave the workforce, could they? I.e. you have a family member who needs a caregiver, whether it's an elderly parent, or your child needs help, whatever. Our younger dd, who is 18 mths old has a muscle condition, for which she receives physical therapy. She's experiencing other delays related to this, and between therapists and doctors, I'd probably have been fired for missing too much work.

Her condition is not too bad, but WOHMs, could you leave the workforce if a family member needed extra help?

 

[DVCLiz]

witch... I mean, have fun!!

 

[DVCLiz]

Oh sure, start an interesting discussion and then bail on us!!

Have a GREAT time!

Thanks!!!!!!! I'll say hi to Mickey for you!!!

 

[DVCLiz]

It's strange to me because it always seems to be used as a reason for a mom working, not a corollary. As in, "I'd like to be home with the kids but I work in case I get a divorce." (okay, obviously not that literal, but the reason behind it is there). To me, it would be strange to forgo the certain thing in life (my young kids need a parent at home) for something that's just a bad possibility. Since I'm married to a man who is divorced, I'm not naive to the potential, and I'm not saying nobody should have savings or what have you, I just can't see giving up the time when my kids are young "in case" later, down the road....

Re-reading my post, I can see how it might come across as being "anti" working mom, which I'm really not to the extent that the kids are truly being put first. My mom worked (though she waited til we were in school and then did nights). Some situations work out okay (split shifts, p/t a couple days a week while kids are at school, etc), I was responding to the 6am-6pm types. I know plenty of people who see their kids less than 2 or 3 waking hours a day, no exaggeration -- Then say "I'd stay home but we can't afford it".....when what they really mean is they'd stay home as long as they didn't have to give up any of their stuff. If you're in NoVA (near me) you know exactly the lifestyle I'm talking about. And of course they all imply that somehow we're "rich" because I stay home, when in reality we just choose to sacrifice things instead of time. It's all just a matter of priority IMO.

I think it's a matter of priority, too. The issue I have is when your priority becomes better than my priority, know what I mean?

In this thread, I see lots of women making good and thoughtful choices in order to achive their goals. But I see at least half of them are doing it at the expense of college savings. It could be said that they are simply shifting the burden of a huge expense to their children, in order to be able to stay home with them in their younger years. Which is better? Is one right and one wrong? No, of course not. For me, I'd much rather work when my children are small and know that I've provided them with a solid education. But that's because that is MY prioity. Someone else feels just as strongly that being at home in the early years has a payoff equal to college money, just in a different way.

OK, I have one hour to pack - MUST get busy - see you all next week!!!!!

 

[mrsltg]

It's strange to me because it always seems to be used as a reason for a mom working, not a corollary. As in, "I'd like to be home with the kids but I work in case I get a divorce." (okay, obviously not that literal, but the reason behind it is there). To me, it would be strange to forgo the certain thing in life (my young kids need a parent at home) for something that's just a bad possibility. Since I'm married to a man who is divorced, I'm not naive to the potential, and I'm not saying nobody should have savings or what have you, I just can't see giving up the time when my kids are young "in case" later, down the road....

Re-reading my post, I can see how it might come across as being "anti" working mom, which I'm really not to the extent that the kids are truly being put first. My mom worked (though she waited til we were in school and then did nights). Some situations work out okay (split shifts, p/t a couple days a week while kids are at school, etc), I was responding to the 6am-6pm types. I know plenty of people who see their kids less than 2 or 3 waking hours a day, no exaggeration -- Then say "I'd stay home but we can't afford it".....when what they really mean is they'd stay home as long as they didn't have to give up any of their stuff. If you're in NoVA (near me) you know exactly the lifestyle I'm talking about. And of course they all imply that somehow we're "rich" because I stay home, when in reality we just choose to sacrifice things instead of time. It's all just a matter of priority IMO.

Didn't come across as anti-working mom to me! I really, truly, mean what I posted as a question - not a judgement or a condemnation - just a question. I don't see a right or wrong answer - I was just curious.

 

[mrsltg]

It's smart for everyone, SAHM and WOHM to plan for the future. I know this thread focused on SAHMs and planning, but you could turn the discussion around, and ask WOHMs if they had to leave the workforce, could they? I.e. you have a family member who needs a caregiver, whether it's an elderly parent, or your child needs help, whatever. Our younger dd, who is 18 mths old has a muscle condition, for which she receives physical therapy. She's experiencing other delays related to this, and between therapists and doctors, I'd probably have been fired for missing too much work.

Her condition is not too bad, but WOHMs, could you leave the workforce if a family member needed extra help?

I don't know about others, but I could, it would be tight - but I could do it if need be. The problem would be daycare and private school - assuming my youngest wasn't the one with the problem and would therefore need care while I was taking whomever to whatever appointments were necessary. KWIM? It would also require belt tightening like eliminating vacations for a while and virtually no eating out and no more new shoes for me!

 

[bellarella]

I think it's a matter of priority, too. The issue I have is when your priority becomes better than my priority, know what I mean?

In this thread, I see lots of women making good and thoughtful choices in order to achive their goals. But I see at least half of them are doing it at the expense of college savings. It could be said that they are simply shifting the burden of a huge expense to their children, in order to be able to stay home with them in their younger years. Which is better? Is one right and one wrong? No, of course not. For me, I'd much rather work when my children are small and know that I've provided them with a solid education. But that's because that is MY prioity. Someone else feels just as strongly that being at home in the early years has a payoff equal to college money, just in a different way.

OK, I have one hour to pack - MUST get busy - see you all next week!!!!!

Well I am doing it at the expense of college savings on one hand, but not the other. By living off of only one income, it means that when I do go back to work 100% of my income can go to my children's higher education. I know a lot of my friends in college had families that worked things the way we are planning on -- moms stayed at home through at least Jr High, sometimes high school and then went back to work. During the college years her paycheck just went to tuition.

I also fall into the camp that doesn't see paying for my kids college as super high on my priority list. DH and I both paid for our schooling, and yes student loans suck, but we did fine with them. If anything we were more focused faster than our peers who didn't have them hanging over their heads. Even if we had the means, our children would not get a free ride from us. We don't want them waking up nights at 18 stressed out about money, but feel that college is their investment in their own future.

Now retirement, that is where our focus is. Me being a SAHM caused a bump in the road on that, but I had started saving when I was 22, so we absorbed that pretty well and are back on track. Not a dime of money will go to college savings until every dollar we are allowed to save for retirement is maximized. For us, right now that is 20% of our pre-tax income and our budget doesn't allow additional "locked up" savings (we do save on top of that, but for big household expenses, future vehicles, etc.).

Speaking from experience, I would 100% rather my parents had funded their retirement fully and didn't give me a dime for college, than to help with college but not have their retirement maximized. (Unfortunately my parents weren't able to do either.) You can control college expenses and have many productive working years to handle the loans. Facing taking care of your parents for decades is a much more scary financial proposition. That's why we don't spread our savings around -- it all goes to retirement until there is nowhere else to put retirement money.