How Stay-at-Home Parents Can Protect Their Finances & Career
How Stay-at-Home Parents Can Protect Their Finances and Career
Being a full-time, stay-at-home-parent (SAHP) in the United States is a luxury for some, a necessity for others, and perhaps something in-between for others still. Whichever it is, it usually equates to a lack of earned income, often for a substantial amount of time. This is of course, problematic for several reasons: While there are single SAHPs, it tends to be more common among couples, married and unmarried. Many SAHPs put their own income and professional growth on hold, which can leave them vulnerable to financial stress and career gaps. In today’s economy, it’s more important than ever for stay-at-home parents to take control of their finances, plan for the future, and maintain career skills. Here is what you can do and what you should be aware of:
Learn About Social Security
Social Security is a federal program in the United States that provides financial support to people who are retired, disabled, or survivors of deceased workers. It is funded through payroll taxes collected from current workers and their employers. Essentially, it’s a safety net designed to help ensure that individuals have some income in retirement or during periods when they cannot work due to disability or death of a primary wage earner.
A lack of earned income means the SAHP stops paying into their social security benefits, which in turn, means that when the time comes, they will be paid out based on their earned income in their most productive years. If a large chunk of time is spent working as a SAHP, that total number will be significantly lower than it could have been if they were being paid for their SAHP work. Given that many women take on the role as a SAHM, they tend to have much lower social security payments than their male counterparts later in life. So that’s an issue. In the U.S., Social Security benefits are generally based on an individual’s earnings record. However, if you divorce, you may still be eligible for benefits based on your ex-spouse’s work history under certain conditions. Here’s how it works:
Marriage Length: Your ex must have been married to you for at least 10 years.
Age Requirement: You and your spouse/ex spouse must be at least 62 years old to claim benefits.
Not Remarried at Time of Claim: If you remarry, you typically lose the right to claim them on your record (unless the new marriage ends).
Your Own Benefits: If you qualify for benefits on your own record, you will receive your own benefits first. If theirs is higher, you may get a spousal benefit (up to 50% of their benefit amount). That means if your spouse earned $100k annually, their SS benefit will be around $3,000 per month, and yours would total about $1,500 per month.
What you can do:
Get married and stay married for at least 10 years–you must be married for this length of time to get any claim to benefits later
Don’t get re-married, as you can lose eligibility to a claim in the event of remarriage
Live until age 62–claim a spousal benefit is up to 50% of your full retirement age benefit if you are both 62 or older at the time of claim
If your spouse or ex spouse dies, you can claim survivor benefits (100% of their benefit) as early as age 60 (or age 50 if disabled)
Limit your time as a SAHP and get back to work
Work FT or PT to continue to pay into social security for yourself!
If you don’t want to get/stay married: that’s ok, but you will be waiving this right to claim.
Limit your time as a SAHP and get back to work
Work FT or PT to continue to pay into social security for yourself!
Remember
Your spouse or ex spouse’s Social Security benefit amount is not reduced if you claim their salary on your record–it costs them nothing for you to claim them
Your spouse/ex does not need to give you permission—the SSA handles everything.
If their benefit amount is higher, you may receive a “spousal boost” to bring your total benefit up to 50% of theirs. 50% isn’t always great, but it’s something.
2. Ensure Your Retirement Savings
A lack of earned income also means a lack of contribution opportunities to one’s retirement savings. This is bad because you stop contributing to your retirement and thus, you have a lot less in your retirement account than you could have had if you were contributing the whole time. That’s a problem.
What you can do:
Get married and stay married for as long as possible! Any retirement savings (401(k), IRA, pensions, etc.) accumulated during the marriage are generally considered marital property and subject to division.
Ask your spouse about retirement contributions and make sure retirement contributions are happening during the marriage. If your spouse’s retirement account was fully funded before the marriage, and they do not contribute any more to it during the marriage, the growth (interest, dividends, market gains) is often considered separate property and would remain theirs in the event of a divorce.
Consider a Prenup/Postnup Agreement: If you become a SAHP, an agreement can define what happens to your retirement funds in case of divorce, or even what happens to retirement funds if you stay married (will they be equally shared?)
If you don’t want to get married: You and your partner should come to an agreement wherein you receive deposits from their paycheck into an IRA or 401K in your name to financially compensate your SAHP labor.
If you are single: There’s probably not anyone else to contribute to your retirement but you! Therefore, limiting time as a SAHP and/or working PT or FT might be the only option. Unless you are independently wealthy and/or can inherent an IRA.
Remember:
Retirement funds earned before the marriage usually remain theirs and yours respectively; growth during the marriage may be subject to division, but not always.
State laws (where you reside if/when you initiate divorce, not where you marry) matter: in Community Property States (e.g., California, Texas, Arizona, etc.) retirement assets earned during the marriage are typically split 50/50. In Equitable Distribution States (most states), Courts divide assets fairly but not necessarily equally, considering factors like length of marriage, each spouse’s financial situation, and contributions to the marriage.
3. Arrange Deposits into Your Own Checking & Savings Accounts
Whether you are married or not, co-mingling money (i.e., mixing money with joint funds) can get tricky. Some couples want to share everything, and others prefer a sense of independence and privacy. There is no right way, but mixing money can make things a little trickier in the case that one person becomes a SAHP.
What You Can Do:
Don’t co-mingle (i.e., mix with joint funds) any inheritances and gifts given to you as this is considered separate property, unless co-mingled.
Don’t co-mingle ALL of your other assets/accounts, keep some things separate if you can! It might make sense to have a joint account, you likely need not comingle everything.
If you don’t want to get married: You and your partner should come to an agreement wherein you receive deposits from their paycheck into a checking account in your name to financially compensate your labor, if not, you may emerge from your SAHP career having earned zero dollars.
Remember:
Any earned income during a marriage, even if it’s in your own account, under your name, will likely be pooled and split up (unless you have a pre/postnumptual agreement that specifies otherwise).
4. Plan for Long-Term Care Before You Need It: Get Life Insurance
A life insurance policy provides a payout to you as a SAHP if your financial provider (or the person who the life insurance policy is for) dies. While it’s often associated with protecting your family’s financial future in the event of a parent’s death, it can be especially valuable for a stay-at-home parent who doesn’t earn a traditional salary. Essentially, a life insurance policy ensures that if something were to happen to you or your spouse, your family could maintain the lifestyle and stability, without facing financial hardship. The best part is, you don’t have to be married to get a policy—you can name anyone as the beneficiary on such a policy.
5. Ensure You’re Protected: Wills and Trusts
It’s not enough to have life insurance or savings: it’s also crucial to make sure you’re properly included in a will and consider setting up a trust to protect your family. Probate is the legal process through which a court validates a will, settles debts, and distributes assets. This process can be time-consuming (6+ months), costly, and public, sometimes taking months or even years before your family receives what they need. A trust, on the other hand, allows you to transfer assets directly to beneficiaries without going through probate, ensuring your family has faster access to funds and privacy. For stay-at-home parents or any caregiver whose contributions are critical to the household, using a trust and having an updated will can provide peace of mind and financial security for your loved ones. Bonus Tip: Make sure you are named on all financial accounts and property deeds.
6. Never Stop Skill Building
Even if you’re currently focused on family or other responsibilities, investing in skill-building can keep your career options open and future-proof your professional growth. Consider earning certificates, learning new languages, or mastering in-demand tools in your industry (skills that employers actively seek). Whether it’s in the evenings after the kids are asleep, early in the morning, or during downtime, dedicating even small, consistent blocks of time to learning ensures your abilities stay current, relevant, and competitive. By the time you’re ready to reenter the workforce, you’ll have a fresh, updated skill set that demonstrates initiative and positions you for more opportunities, higher pay, and smoother transitions.
Common Financial Pitfalls for Stay-at-Home Parents
Many stay-at-home parents fall into common financial pitfalls without realizing the risks. For example, having unlimited access to joint accounts or credit cards with a spouse can feel convenient and empowering, but it doesn’t provide true financial security. If something unexpected happens like divorce, illness, or death, joint accounts can complicate access to funds and leave you vulnerable. Relying solely on your partner for financial decisions, emergency access, or savings also limits your independence and protection. To avoid these risks, it’s important to have your own accounts, emergency funds, and a clear understanding of shared finances, so you’re financially prepared no matter what life throws your way.
Take Control of Your Financial Independence
Avoiding financial pitfalls is key to protecting yourself and your family. At Wanderlust Careers, we help stay-at-home parents build financial resilience, set up independent accounts, and plan for emergencies. Whether it’s creating a personal budget, understanding joint accounts, or establishing long-term financial security, our coaching and resources empower you to take control of your finances and safeguard your future.
Book a Complimentary SAHP Career Consultation Today and gain the tools, knowledge, and confidence to manage your money independently.