Retirement Planning If You Stay Home With Your Kids

Young couple with baby reviewing their retirement plans
Photo: Valentine/Getty Images

When you make the decision to have one parent stay at home with your children, you may be making some financial sacrifices to make it happen. You might need to eat out less or take fewer vacations. That doesn't mean you should stop saving for retirement, though. 

You could choose to rely on just one spouse's contributions to retirement during that time. However, it is best if you continue to contribute to retirement accounts for both spouses. This will help the stay-at-home parent in the event that the working parent becomes disabled or there is a divorce or a death. The retirement savings you contribute while you stay at home will make it easier to reach your overall retirement savings goals.

Retirement Savings Options for Stay-at-Home Parents

According to the law, you cannot contribute to an IRA unless you have an earned income. However, if you are married, you are allowed to open a spousal IRA if one person is staying home and not earning an income. The income contribution limits are currently the same as the other IRA options. You can also open either a traditional IRA or a Roth IRA as part of the plan.


You can open the IRA at a brokerage house and set up an automatic monthly contribution, or you can set it up at your local bank or credit union.

Finding Money

If you are making a lot of financial sacrifices to be home with your children, you may be struggling to find money to contribute to retirement on a regular basis. If this is the case, you can consider ways that you can earn money to put toward retirement. Some parents plan on just taking a few years off until all of their children are in school full time and increasing retirement contributions when they return to work, but if you space your children a few years apart and have more than one, you may be out of the workforce for more than 10 years. That is a lot of time to lose on retirement contributions.

Additionally, you may find that your expenses go up as your children grow, and it may still be difficult to find the extra money you need to put toward retirement. Even if you cannot contribute very much each month, a small regular contribution will make it easier to reach your retirement goals.

Working Part Time

One way that you can find extra money is to work a part-time job. Many companies do not offer retirement accounts to employees that do not work more than 25 hours a week. But working allows you to open an individual IRA, and if you are not married to your partner, you may need to work just enough so that you can open an IRA on your own. If you are going to work part time for a company, consider looking for one that allows you to make contributions to a 401(k) plan even if you are not working full-time hours. You may consider working up to the minimum requirement to participate in their retirement plan.

Working From Home

If you are self-employed, work as an independent contractor, or operate your own business, you will need to plan for your retirement on your own. Many stay-at-home parents are also work-at-home parents, and they need to take retirement planning seriously.

There are many retirement accounts you can qualify for if you are self-employed, such as the SEP IRA or a Solo 401(k). You will also need to pay your self-employment taxes, which will pay into the Social Security system. If you plan taking temporary parental leave, working from home in the meantime can bring added financial independence and peace of mind, and keep your retirement planning on track.

Saving enough retirement money for both partners is a critical part of your family financial plan. It's only one aspect, though, and you may want to consult with a financial planner to make sure you're staying on track through every different season of your career.

Was this page helpful?
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. IRS. "Publication 590-A (2019), Contributions to Individual Retirement Arrangements (IRAs)."

  2. IRS. "Retirement Plans for Self-Employed People."

  3. IRS. "Self-Employment Tax (Social Security and Medicare Taxes)."

Related Articles