Why Every Stay-at-Home Mom Should Have Her Own Retirement Account

by TTMK on December 8, 2014 · 7 comments

The following post is from staff writer Melissa Batai


My mom has a friend, “Sue” who we’ve known for years, since I was in elementary school. From the time we knew her, Sue had a rocky marriage to “Peter.” The two were complete opposites in every way: Sue is loud, outgoing, and a spendthrift who loves to tell jokes and laugh. Peter is quiet, introverted, and a penny pincher. He likes to fade into the background and not be the center of attention.

Sue and Peter were married for nearly 35 rocky years until Peter, who drank a lot when they first married but turned into a full-fledged alcoholic over the years, had an affair. That was what finally prompted Sue to leave.

For their entire marriage, Peter was the breadwinner, often working overtime to support his family, while Sue was a stay-at-home mom who took care of their five children. Because Sue liked to spend, money was always tight.

After the divorce, Sue got a job as a cafeteria lady at the local elementary school making $12 an hour. She depended on spousal support from Peter to make ends meet. She also was entitled to part of his Social Security when he retired. The problem for Sue was that even though they were divorced, she was still dependent on him financially for monthly expenses and retirement.

After they divorced, Peter’s drinking continued to spiral out of control until he was given an ultimatum at work–either get fired or retire early. He opted to retire early, and two things happened. His retirement was substantially smaller than anticipated because he retired in his early 50s and he was no longer contributing to Social Security, so that would also be smaller than anticipated.

Meanwhile, because he was no longer bringing in an income, his spousal support to Sue greatly diminished.

In hindsight, Sue should have probably left Peter much earlier in their marriage. However, she had 5 kids to raise and doing so as a single mother wouldn’t have been easy.

But because she entered the workforce in her mid-fifties after 35 years at home, she has trouble making a living wage. In addition, her retirement from Peter is fairly small.

Looking at Sue’s situation, I realize that every woman, especially a stay-at-home mom, should have her own retirement account. Had Sue and Peter set aside money for Sue in a Roth IRA while she stayed home with their children, she would be in a much better financial situation than she is currently. Sure, she would have had to split the retirement account with Peter, but she would have been in control of the savings, unlike relying on Peter’s retirement savings from his job.

Most couples don’t anticipate getting divorced. However, setting aside money in a separate retirement account is a smart move for a woman who is financially dependent on her husband.

My Question for You

Do you think every woman should have her own retirement account separate from her husband? Have you known other couples in situations similar to Sue and Peter’s?

Ray’s Comments

My viewpoint on this is a bit different.  I think that ideally, couples should pool marital assets together and go “all in” together.

Beyond that, I don’t think there is any reason why women have special needs for separate bank accounts than men do.  The reason is that both men and women can work, and that there could also be men relying on female breadwinners, stay at home dads, etc.  The same logic in the post above could absolutely apply to the men in those such situations needing their own separate accounts. 

The bottom line is that I don’t agree with the distinction that women have an extra special need for separate accounts from their spouses vs. what men need, in 2014.  I realize this could be a hot button topic, and am curious about what you the reader thinks about it.

{ 7 comments… read them below or add one }

Dee @ Color Me Frugal December 8, 2014 at 7:48 am

As someone who recently became a SAHM, I have thought about this. However, my situation is different because I worked before becoming a SAHM and I already have quite a bit in my own retirement accounts. My hubby and I plan to keep putting money in a Roth for me now that I no longer work outside the home. Regardless of which spouse stays at home, I think it’s a good idea to put away as much in retirement as possible for both spouses.


Little House December 8, 2014 at 8:57 am

That’s a rough position to be in. I definitely think that a SAHM needs some kind of retirement account in case things fall apart down the road or even if they don’t, enough for both people to retire on. Another thing to think about is once the kids are old enough (all in school full-day), taking on a part time job specifically for saving for retirement is a good idea for anyone.


Emily @ Simple Cheap Mom December 8, 2014 at 4:43 pm

I’m a SAHM mom. I do have some retirement accounts from the days when I was working, but definitely not enough to support me in retirement. My retirement planning is more about what would happen if he were to pass away early rather if we were to divorce.

I understand no one plans to get divorced, but we’ll cross that bridge if we get there.


Kasia December 10, 2014 at 1:43 am

Husband and wife should have separate accounts or if joint clearly set out rules as to who gets what should they divorce. A household is run as a team and money should be pulled together however it’s important to stay independent and have your own accounts also. While going into a marriage divorce and separation are far from your mind, in this day and age it’s better to be realistic and neither party should be overly dependent on the other.


maria@moneyprinciple December 10, 2014 at 2:34 am

My short answer to this is ‘yes’. I’ve been doing some research on women and personal finance and the evidence is clear: without finanial separation women are very vulnerable to mishaps and very large problems. It is high time for women to take their finances in hand.


TTMK December 12, 2014 at 8:41 am

The thing is, if married the money is equally divisible upon dissolution of marriage (based on my understanding of states in the US, anyway). So, if a man worked and saved $200,000 in his retirement accounts while his wife stayed home, he wouldn’t keep the whole thing. It would be equally divisible and allocated as $100,000 each. This is the crux of why I don’t think the separate account concept, to protect one gender, makes much sense. It’s all divisible anyway as I understand it.

Plus, operating together as a team “all in” together can bring people together more than saying assets are “mine and yours”. But, we all have different circumstances, fears, and life histories that shape how we view things – so what works for me might not work for another. It makes for interesting discussion!


Jon @ Money Smart Guides December 11, 2014 at 6:08 am

I think regardless if we are talking about a stay at home mom or dad, both spouses need to work together as a team to meet their financial goals. This includes retirement. the way I look at it, if my wife stays home to raise the kids, we will still max out her IRA during this time because it is in our best interest. We are a team and we do what is best for the team.

We still have our personal accounts so we have some money to spend at will, but for the most part, it’s all about the team.


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