TL;DR

A husband’s desire to secure his SAHM wife’s retirement reveals the fragility of plans solely dependent on marriage and single-income households. Diversification and financial independence are crucial, not just wishful thinking.

Story

A heartwarming tale of a husband wanting to secure his stay-at-home wife’s financial future… or is it? While the desire is noble, the path suggested online is paved with potential pitfalls. Let’s unpack why this seemingly simple scenario is rife with complexity and lurking dangers.

The advice revolves around spousal IRAs, leveraging joint filing status, and even life insurance. On the surface, these appear sound. But what lurks beneath? Like the 2008 housing crisis built on shaky mortgages, these well-intentioned plans can crumble under unforeseen circumstances.

Consider the spousal IRA: while allowing contributions based on the working spouse’s income, it hinges on the marriage remaining intact. As one commenter’s divorce story reveals, what seems secure today can vanish overnight. ‣ Spousal IRA: Retirement account funded by a working spouse for a non-working spouse.

The suggestion of relying on joint filing status for maximizing contributions also raises eyebrows. What happens if the relationship sours, or worse, financial infidelity emerges? Suddenly, shared finances become a battleground, and the ‘secure’ retirement fund transforms into a contested asset.

Even the seemingly innocuous life insurance advice carries a cynical edge. While protecting against the breadwinner’s demise, it also underscores the precariousness of the SAHM’s financial dependence. It’s a stark reminder that without independent resources, she’s one tragic event away from financial ruin.

This isn’t about discouraging retirement planning, but rather advocating for a more robust, independent approach. The SAHM’s financial future shouldn’t be tethered solely to her husband’s income or marital status. Think of it like diversifying an investment portfolio – don’t put all your eggs in one basket, especially one as fragile as a marriage dependent on a single earner.

Advice

Don’t rely solely on spousal accounts or joint filing. SAHMs (and everyone!) need independent resources & diversified financial strategies. Divorce and job loss happen.

Source

https://www.reddit.com/r/personalfinance/comments/1imc9r5/setting_sahm_wife_up_for_retirement/