Why We Fund a Spousal IRA

In October 2016, right before the presidential election, we finally fully funded an IRA  (Individual Retirement Account) for me. And since I don’t currently make a significant amount of money being a SAHM, we created what is called a “Spousal IRA” in my name, which allows us to use my husband’s income to fund an IRA for me since I don’t have enough income to meet the IRS qualifications to fund an IRA. We’re blessed to have the luxury of having enough income from my husband’s work to fund it, and this is the first year we have had enough to contribute enough to reach the yearly limit of $5500.

Having a spousal IRA not only puts some money in my name for our retirement years, it also is a concrete acknowledgement that the work I do on a daily basis does have value, even if it is only my husband who values it. This is important to me because while my husband and I both like the flexible lifestyle that comes from having a family in which only one person is dedicated to producing income, it’s humbling to be the one at home who is not contributing financially.

While I know that our family is incredibly blessed to be able to afford for me to stay home, it’s not necessarily a role I’m completely comfortable with. Our society has an uneasy and contradictory views about stay at home parents. While I think it’s easier for women to not be income earners than men, women are the ones that realize we’ll be judged harshly by some in society no matter what choices we make when it comes to procreating and creating the lives we want to live. We aren’t supposed to make the “selfish” choice to work outside the home, since the majority of U.S. adults believe children with two parents are better off when one parent stays home, but if we do stay at home, we’re often seen as not contributing to society and even as lazy. Especially if we remain outside the workforce once our kids go to elementary school. 

Once my last child did go off to kindergarten in 2016, I, like 57% of stay at home moms , did think about going back to work. And while I did several interviews for part time positions, the companies I interviewed for either didn’t offer me the position or I determined the position wasn’t a good fit with our family’s needs. So after a while I stopped focusing on finding a job, especially when I started to think about the children being off of school during summer and how difficult that will be to juggle with two people working. Also, while a part time job would probably be a good fit during the school year, I would be just working to pay for childcare during the summer, plus a portion of what I make during the year would be going to all those days during the year kids get off that adults don’t. And while if the right job were to appear it would totally be worth it, we’ve decided that, for now, it makes more sense for me to not do any steady work, although I do have occasions to freelance.

So while I might not be bringing home much bacon at this point in my life, that does not mean that I can’t plan financially for my golden years. My husband and I are a team, and investing in a spousal IRA is a concrete way that we show that my contributions to our household matter as much as his.

How about you? How does your family manage to balance making and saving money with running a home and/or raising a family? Are you or your spouse at home? If so, does your household fund a spousal IRA and how much of a priority is it? If you want to find out more about spousal IRAs, a great place to start is by reading about it at Investopedia or feel free to ask me any questions you might have.  

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