Retirement Planning for Mom
by Meg Baird ([email protected])
November 19, 1997

No one would deny I have a diverse work history -- I've done everything from managing a high-end antique store in the Hamptons to taking care of cattle, horses and chickens and cleaning dog kennels. I've worked in a toy store, for a landscape company, and even stood on a factory assembly line boxing diapers.

I have learned valuable lessons from all of these jobs but none of them prepared me for the challenging career that I have now -- being a stay-at-home Mom.

To all you moms out there who are working full-time and taking care of your families, you have nothing but my utmost respect and admiration. I too worked full-time after my first son was born. To do this successfully takes a degree of organization that most corporate executives would envy. I remember telling my husband, "The house will be clean as soon as the baby goes to college."

As hard as working full time was, staying at home with the kids has to be the hardest, lowest-paying, most stressful, least appreciated, most rewarding, and absolutely wonderful careers. Little kids are both physically and emotionally draining. After my second son was born, I didn't get a full night's sleep for almost two years, much less get 15 minutes to myself in the bathroom. Those toothless smiles though, made it all so worthwhile.

There's only one problem: the retirement plan stinks.

Until recently, couples with a non-working spouse could only put a total of $2,250 into their IRAs. The new Roth IRA changes that. Under the new law, starting in 1998, couples with adjusted gross incomes of less than $150,000 can put a total of $4,000 into their IRAs -- $2,000 for mom and $2,000 for dad.

This is great news for all families out there with moms who aren't getting paid for working so hard. Since Mom isn't putting money into her Social Security account, much less a 401(k), you need to stash away as much money in an IRA as possible.

Using a self-directed IRA with a discount broker and an approach such as the Foolish Four strategy makes sense. It's easy, doesn't take a lot of time, and requires very little research. It's also comforting to know that your account is growing every year, so you can worry about more important things, like what to have for dinner besides hot dogs and macaroni and cheese.

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