Stay at home parents, does this make sense to you?

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Litcrit

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My husband is a SAHD in a country where it is pretty unusual for either parent to stay at home. He is a high school graduate and a musician, but unlikely to ever be ‘properly’ employed - and he’s not interested in a 9-5 job. :cool:

His parents are, of course, concerned that I might some day leave him and he won’t be able to support himself.

So we’re gonna start a pension fund in his name. That way, he’ll have monetary rewards for his work, which is otherwise unacknowledged - a daycare worker gets paid, right? He’ll also have security and his parents will be relieved. And one day, when we grow old, we’ll both be receiving pension checks and equally contributing to our household.

What do you think? Is anyone here doing that? Do you think it makes sense?

Of course, we’re not doing it because we’re planning on getting divorced or whatever. :rolleyes: Just to clarify.
 
Makes perfect sense!

I am a SAHM and my husband works, he contirbutes to his 401k and towards his Social Security through his employment, he also has an IRA. Since I do not work we have set up an IRA for myself, there is nothing wrong with that!
 
Is he a working musician or trying to break into the music bussiness?
 
I was a SAHM for many years now a part-time worker and probably soon to be full time worker. My youngest is going to graduate from high school in 2 years.

We set up some spousal IRA’s to reduce our tax obligation. Not because they were my right to have them or any fear that I’d need them. So I don’t think there is anything wrong with it.

However, I always assumed that at some point I would work to contribute to the family financially. Why isn’t that in the plans for your family?
Why on earth do his parents assume he would not be able to support himself?
 
As a SAHM, I’m not too sure what you’re doing isn’t overkill. Just by being married to you while you are contributing, he’s eligible for a portion of the retirement savings that you’re contributing. If you two were to divorce, his lawyer would rightfully argue that half of the retirement savings are his.

I think that putting all retirement savings into one account is best for several reasons. First of all, the combined account will grow faster and therefore gain more in compound interest than separate accounts. Secondly, he has the protections already in place that I mentioned in the previous paragraph. Lastly, there’s the marriage aspect of money. It’s not what’s mine is mine and what’s yours is yours anymore. Dave Ramsey goes on at length about this. Check out what he says. He’s a very smart man.
 
Chronister4673 said:
Just by being married to you while you are contributing, he’s eligible for a portion of the retirement savings that you’re contributing. If you two were to divorce, his lawyer would rightfully argue that half of the retirement savings are his.
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Litcrit does not live in the US…so the laws may be very different.
 
I don’t know where you live, but setting aside funds for his retirement as well as your own doesn’t seem like it would be a problem. I would just make sure that setting up a separate account financially makes sense. Like for me and my husband. I am the primary breadwinner, and so I put a chunk of my money into a Roth for me, AND one for my husband.
 
I know that if you have a Roth IRA, you can only put a certain amount per year in one – I think it’s $5,000. If you both have one, that’s $5,000 each per year so that’s $10,000 per year that would grow that both of you would gain benefit from. So from a financial aspect, that makes much more sense.

Of course, if you’re in another country, you’d have to see what the laws are there.
 
wardrandolph said:
Is he a working musician or trying to break into the music bussiness?
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He has a few gigs every now and then. It would be awesome if he were to become a huge star one day, but we’re not counting on it financially. Anyway, he is most importantly a SAHD, and this is his greatest contribution to our family! 👍 🙂
Seatuck said:
However, I always assumed that at some point I would work to contribute to the family financially. Why isn’t that in the plans for your family?
Why on earth do his parents assume he would not be able to support himself?
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He is hoping to gradually earn more and more from his music… but with a high school diploma it is nearly impossible to find a ‘real’ job here… if he were actually interested in one. We don’t know when we’ll stop having young kids around, so it can be a while… Anyway, if he were to find a safe, steady job, there would be no more need to deposit in the pension fund, because that’s automatic where I live.
Feanaro_s_Wife said:
Litcrit does not live in the US…so the laws may be very different.
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Thanks, Malia, I didn’t clarify that one… Yes, the laws are different… but I’m not quite sure what they are. :o . One thing I should probably mention is that I automatically contribute towards a government pension fund out of my paycheck, so his account will be the only ‘private’, bank account we’ll have, and I’ll be receiving a gov’t pension.

Thanks for your thoughts, feel free to keep them coming! 🙂
 
Chronister4673 said:
I think that putting all retirement savings into one account is best for several reasons. First of all, the combined account will grow faster and therefore gain more in compound interest than separate accounts. Secondly, he has the protections already in place that I mentioned in the previous paragraph. Lastly, there’s the marriage aspect of money. It’s not what’s mine is mine and what’s yours is yours anymore. Dave Ramsey goes on at length about this. Check out what he says. He’s a very smart man.
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Since DH has a plan with the company he works for and a pension from the military, we used any money we had to put into a private registered retirement savings plan to set one up for me (I was a SAHM for 16 years). It only makes sense since I’ll be earning much less than he will thus getting more out of the plan. Were the plan for him, his income tax rate would eat up much of that RRSP income. My tax rate will be much lower than his.
 
I think it’s a fab idea, whatever the country and whatever the circumstances- with or without relief for the in-laws.
 
since is income is irregular it would make sense to save all of it in his IRA, and since he is self-employed investigate special IRAs for such folks that allow larger contributions and other beneifts. He should also report all income so he has a record of working for SS purposes. It may be possible for part of your income to be deposited in a spousal IRA as well. get good financial planning, legal and tax advice.
 
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