Join my email list and get FREE ACCESS to the MSM Freebie Library, including my top printables & eBooks.

How Stay-At-Home Moms Can Help Save for Retirement

Guest post by Michelle, writer for covering topics in the Endorsed Local Provider program.

You’ve got to admit that at-home moms have special challenges when it comes to saving for retirement. Most moms who work outside the home can sign up for a 401(k), get the match and contributions are made automatically.

At-home moms must be much more deliberate. Even if your spouse participates in a workplace retirement plan, whatever you can add to the pot will make retirement that much sweeter.

But how to find the extra cash? I’m with ya, sister! Any new expense is a big deal for already tight budgets. So, let’s back up just a minute.

For your retirement savings plan to be successful, you need to be out of debt and have a solid emergency fund. That way, you have a secure foundation to build wealth that will last. And, you’ll be able to funnel more of your income into your retirement without busting the budget!

Once you’re debt-free and have that rainy day fund, you’ll have no trouble finding $100 a month for retirement. If you do that for 20 years and your investment grows at 12%, you’ll have added nearly $100,000 to your retirement fund. But, I bet you can do better than $100 a month.

Why 12%? Good question. Dave Ramsey, money-management expert—I’m a fan who’s blessed enough to work for him—uses a 12% rate of return because it is the actual, historical growth rate of the S&P 500, a commonly used indicator of stock performance. You can try different amounts and rates of return using his investing calculator.

Suggestions To Make Some Extra Cash

Obviously, couponing is a great way to save some serious money, and Money Saving Mom® can teach you everything you need to know. Track your savings and direct that money to your retirement fund.

More ways to save:

  • Adjust your spouse’s withholding – The average tax refund this year will be about $2,800 according to the IRS. That’s $233 that isn’t coming home in your spouse’s paycheck. Adjust the withholding and send the savings straight into your Roth.
  • Insurance – Insurance is necessary, but it doesn’t have to be as expensive as you think. Shop around, raise your deductibles, and combine policies to get the best deal.
  • Utilities – Energy-saving solutions are often money-saving solutions. Use a smart power strip that stops drawing electricity when appliances are turned off, raise or lower your thermostat by one degree to lower your power bill by 5%, and run the dishwasher and wash clothes only when you have a full load.
  • Phone, Internet and TV – Bundle services for a better deal, drop premium cable channels, and get rid of costly extras like internet service on your cell phone, or just negotiate a lower rate.

Part-time work is another option. As a spin on the traditional work-from-home suggestions, my list includes services that, as a work-outside-the-home mom, I would totally pay for if I had the money. I’m guessing other moms would, too.

  • Tutoring – The hairy, scary stuff—algebra, chemistry, calculus—Stop! I feel dizzy.
  • Gift packaging – Some people have the gift of making gifts look good. Wrap birthday and Christmas presents, assemble gift baskets—who knows where this could go?
  • Party planning – Got an eye for detail and a nose for bargains? Of course! You’re a mom! Party on!
  • House cleaning – I know—as if you didn’t get enough of this at home. But it is a viable way to get some extra money if you’ve got the drive to do it.

More good ideas you don’t need me for:

  • Home-based customer service agent – There are several options here. Just search online for home-based customer service companies.
  • Freelance – It’s not just for writing or graphic design. If you have skills in foreign language, software development or administrative support, you can freelance. Again, a quick internet search will turn up lots of job opportunities.
  • Sell stuff – Dave recommends this all the time for paying off debt, but it works just as well to raise extra money for your retirement fund. You can sell online or with your local consignment shop.
  • Blog – It might take some time to see any real money from blogging, but it’s certainly a viable way to bring in an extra $5,000 a year. Successful bloggers are happy to share their secrets, so there’s no shortage of guidance or inspiration.
  • Consult – If—in your life before kids—you gained some valuable and marketable skills, you can earn a significant income as a consultant. Start by checking out consultant job listings on any job listing service to see what companies are looking for.
  • Nurse on call – Licensed nurses can make great money providing phone-based triage and medical information for pharmaceutical companies, insurance companies or other medical organizations.

I can’t stress enough the importance of watching out for scams as you pursue your work-from-home career. You should not have to pay to get a job, and the hiring process should be similar to the process for a work-outside-the-home job. Be careful!

Here’s What To Do With Your Extra Money

The best way to invest for retirement is with mutual funds in a Roth IRA (or a Spousal IRA), because when you retire, you get to withdraw from it tax-free. Even income from a 401(k) is taxable when you retire, so a Roth gives you a lot more bang for your buck.

If you and your spouse file a joint tax return, you can contribute $5,000 to your own Roth IRA—even if you don’t earn an income. That $5,000 a year, earning 12%, will grow to more than $400,000 in 20 years. Keep it going for another seven years, and you’ll have $1 million—as a stay-at-home mom!

Another equally crucial component of a successful retirement plan is your dedication to continuing your savings for the long term. Retirement is for retirement, not for emergencies. That’s why you built up your emergency fund before you started investing.

It’s also important to work with a professional when you open your Roth and select your mutual funds.

The best advice I can offer is to tell you to tackle this issue with the same intensity that you’ve used to attack other financial issues for your family. One thing I know, Mom can get it done!

If you would like to learn more about retirement saving and planning, Dave Ramsey has a free service that can help you find a trustworthy investment advisor in your area. Find out more here.

Subscribe for free email updates from Money Saving Mom® and get my Guide to Freezer Cooking for free!


  • Excellent ideas…people take for granted that such a small amount of money grows exponentially with a little time, patience and the discipline to leave our hands off of it. 🙂

  • Great, and very informative post. Thank you for the details!

  • Onna says:

    I’ve always wondered HOW to adjust my husbands withheld amount. It seems that it is explicit to how many he supports? Any advice??

    • Jenelle says:

      @Onna, If you go to the IRS website they have a witholdings calculator. You enter how much has already been withheld, what your current withholding elections are and how much money you expenct to make by the end of the year, and it will tell your wether you are under or over witholding and give you a suggestion as to what you should change your election to.,,id=96196,00.html

    • Anna says:

      @Onna, to change the withholding number you can contact your husband’s HR person and tell them what number to change the withholding to on his W2. This is not explicit to number of dependents but they just use that as a guide. The number on your W2 can be different than what is on your tax return. Also if you have state and federal withholdings (pay taxes for both), you can have different numbers for each one. Like Jenelle suggested, go to the site to see how much you can comfortably withhold. Just be careful not to withhold too much because if you don’t withhold a certain amount for taxes (so that you owe alot of money), you can be fined.

  • Maureen says:

    Why work with a professional to open a Roth? Why not just open one at at any brokerage with low expense ratios and choose an index fund?

    Over the last 10 years, the S&P500 index has beat 90% of managed funds. Over the long-run managed funds do even worse.

    • Meghan says:

      @Maureen, I completely agree–you can open a ROTH IRA for free with a low-cost company like Vanguard (and, no, I don’t work for them, but I do invest with them), and pick an Index Fund whose investments will mirror those of the S&P. Or you can pick a target fund that will automatically change investments over time as your time goal approaches (getting more conservative as retirement nears, for example).

    • Robyn says:

      @Maureen, I think a “DIY” Roth is an option, but it’s a question of how you want your nest egg handled. When I was in college I started my Roth through eTrade, and the result is that I have money in a Roth — but not the way I would have invested it had I known better. Shortly after my husband and I got married, we went with a financial adviser who opened up business near our home. As a result, we have more money in our Roths — but the guy was a bit of a weasel and pushed us toward investments that make the best money for him. Frustrated with that experience, we used Dave’s program that Crystal mentioned and found another local guy who really seems solid. He’s given us advice against things that would make him more money, and he seems to keep a close eye on everything. He’s been in this business for longer than I’ve been alive, so he has a good feel for things. He explained everything he recommended we do, gave us options, and helped us set up funding for our two Roths and our son’s 529 (college savings). He doesn’t send us tons of junk mail and annoy us with phone calls like the other guy did, but he does touch base with us regularly with actual useful information. Before we ever actually met with him, he sent us a questionnaire to give him an idea of where we are financially and what our goals are — something the first guy never really asked about. I feel much more at peace working with our current financial adviser than I have about any investments I’ve made in the past — and to me that’s worth the price of his services.

  • Meghan says:

    I completely agree about adjusting withholdings–if you’re getting a large tax refund, then you’re giving the government an interest-free loan by letting them keep your money for a year before they give it back to you. Instead of getting a big tax return, by getting the correct amount in your (or your spouse’s) paycheck, you can invest/save the money throughout the year, which means you can earn interest on/invest your money, instead of letting the government have it.

  • Daisha says:

    I have absolutely no knowledge in this area so thank you for the valuable information!! Can’t wait to share this with my husband.

  • My husband and I have been putting money in a Roth IRA in my name for quite a few years, but recently it occurred to me that since he’s older than me by 7 years, perhaps we should be focusing more on things in his name. I am pretty clueless, but am assuming that there are age requirements for getting to retirement money, and we could get to accounts in his name 7 years sooner.

    Would love to know if I’m making this too complicated.

  • Suzy says:

    Excellent article.

    Open a Utah Educational Saving Plan ( 529 Plan on Friday or Saturday and make a $25 contribution and Utah will match it. Great insentive to get started for your kids/grandkids if you haven’t already.

    This only good on May 28th and May 29th (5/29–get it).

    You do NOT need to be a Utah resident nor do your kids have to go to school in Utah to take advantage of this offer.

  • Please don’t assume that all moms who work outside the home have access to a 401(k) or anything even similar.

    I work for state government (as does my husband) and all of us pay into a state retirements system (not social security). In addition, 401(k)s are not available to us. So that means no match, either (so much for all those who act like government employees get all these great benefits, but that’s another can of worms).

    We each have a Roth IRA account for our retirement contributions.

  • Tammy says:

    One thing I always find ironic about ways to make money is to do things that make others spend money.Tutoring,gift packaging,party planning and house cleaning are things I do it without .I am not that smart so tutoring so that is not an option.The rest I would have to think twice about before doing because I would never spend the money on them.

    • Brooke says:


      I am a little confused by this comment. Any time you offer a good or service, someone else is spending money. This does not seem ironic to me. You’re not “making” them spend money—you are providing something of value that they want, and they in turn give you “certificates of appreciation” in the form of dollars. Any time you buy something from someone else, do you consider that they are “taking” money from you? Other than mining for gold, or gambling, I cannot think of anything…

      • Tammy says:


        Just like this snippet on ways to cut back on money:Eliminate services (housecleaning, landscaping, etc.) If you hire out household services to others, consider trimming back or eliminating them. Instead, put aside some time each week to do them yourself – not only will you save money, but you’ll find that many activities can get the whole family involved (like housecleaning).

        Since everyone has their opinions I find it hard to try to do these things when they are on a list of ways to cut back on money.

        I love reading this blog and don’t agree with everything but also have learned lots from Crystal.

  • I think some of this information is misleading.
    –12 percent is quite an ambitious rate of return, even in the long-term. – especially for a new investor who is not comfortable with a fair amount of risk.
    –Adjusting your spouse’s withholding doesn’t really bring home more money; it just spreads out the money throughout the year and saves on giving the government an interest-free loan.
    –Roth IRAs only work for those who qualify – must meet certain income requirements.
    –While Roth IRAs are a great investment tool for many people, they are not appropriate for everyone.
    –You don’t necessarily “get more bang for your buck” with Roth IRAs. You do pay tax on the income before you invest in a Roth unlike in 401(k)s or traditional IRAs where the money is invested pre-tax. So yes, you pay tax on the latter two when you withdraw but you have more to invest to start. Roth IRAs, therefore, make sense when you are in a low tax bracket now and expect to be in a higher tax bracket in retirement or if you expect that tax rates will go up by the time you are in retirement.
    –a Roth IRA does not have to be invested in mutual funds. But if that’s the route you choose, why go to a financial advisor? Call Vanguard, Fidelity, or T. Rowe Price or one of the other solid mutual fund companies and invest directly. Much less expense that way.
    –If you wait until you are out of debt to invest in your retirement, then you are losing out on opportunity cost since you are limited by the amount you can invest each year in an IRA or a 401(k). You can make a plan to do both simultaneously – pay off your debt and invest in retirement.

    (My comments are based on having a degree in finance, 20 years of investing, and having saved over $400,000 in our retirement account in that time period.)

    • Tammy L says:

      @Michele @ Saving Money In Real Life, I appreciate both the article above and your comment here.

      I am also curious about the “need to be out of debt first” statement.

      Does that include a mortgage payment? We have no debt, but we rent an apartment and unfortunately where we live, the rent for our 2br. apartment is nearly 50% of our take-home pay. (We could rent cheaper, true, but with 4 children, I don’t feel too guilty about having a 2-bedroom with a washer/dryer in the apartment. :))

      To actually save up for a house debt-free and then start investing in retirement? And like Michele says, we would be passing up IRA and 401K yearly limits for many years before starting…

      But yes, debt free is definitely “freeing”! Even with a rent payment each month! 😀

      • WilliamB says:

        @Tammy L, I don’t think you need to be totally debt-free to save for retirement. However, you incur a huge penalty (up to about 20%) if you take money out of your retirement fund[1], so you don’t want to use it as an emergency fund. Ergo the suggestion to get an emergency fund and perhaps a life happens fund before you work on your retirement. Once those are in place, then decide how to split your funds between eliminating debt and saving for retirement.

        Also – 12% is very aggressive and, in my opinion, very optimistic. I use 5-8%. This still compounds very nicely over the years.

        For sound, easy to understand financial advice I recommend Michele Singletary, who writes a column called “The Color of Money.”

        WilliamB, who has about the same background as Michelle, albeit with different dollar amounts.

        [1] I’m glossing over a huge amount of details, including the difference between taking money out of the account and borrowing against it.

      • Abbygail says:

        @Tammy L, These suggestions (from the article_ all are following the Dave Ramsey Plan. Look him up and it will all make sense. Most who follow his baby steps are debt free within 2-3 years.
        1st step is $1000 emergency fund
        2nd step is pay off all debt (smallest to largest) except your house. “snowball” the payment from the smallest into the next debt.
        3rd step is 3-6 month emergency fun
        4th step is invest 15% of household income in Roths and pre-tax retirement accounts
        5th step is invest for child’s education
        6th step is pay off the house
        7th step is give freely and rake in the dough! 🙂

        Dave says you must take baby steps in your finances to keep focus and attain goals (and let me tell you it works!!)

    • Abbygail says:

      @Michele @ Saving Money In Real Life, regardless of what tax bracket you are in now, would you rather pay tax on $10,000 per year when you invest it or $70,000 per year when you withdraw it?
      Investing in “big name” investing firms may be cheaper upp front, but I would rather have the guidance and advice of someone who has been doing this for a long while.
      And if you followed Dave Ramsey, you would know he suggest stopping investing while becoming debt free so you can focus and accomplish your financial goals (usually within 2-3 years) so that you can really make great strides in investing. If you are constantly paying for car payments and credit card and other interest, you are spending a lot of money that you could be investing. He gives an example of your monthly car payment (avg. $450)- if you didn’t have it every month, and invested instead, you would have a million in 20 years. Not everyone believes what Dave says, but those who do and follow it will be sitting pretty in retirement and leaving a pretty good future for their family. Living like no else, so we can LIVE like no one else later!!

      • @Abbygail, I agree that Roth IRAs can be great investment vehicles – I invest in one every year. My problem was that the original post made a blanket statement that Roth is the best, and that’s not always the case (depending on tax brackets and individual circumstances). And it also led the reader to believe that you don’t pay tax on Roth, but really it comes out on the front end.

        There is nothing wrong with having guidance from someone who has been investing for a long time. Unfortunately, not all financial advisors are created equal. And many will take advantage of their clients to earn commission for themselves. My main point was, though, that if you are going to invest in a mutual fund, then do it directly. You don’t need to pay someone to do it for you.

        While, I don’t follow Dave Ramsey as I’ve never been in debt, I am aware of his financial advice. And I do think it’s good solid advice for people who are deep in debt and need a plan to get out. And if it’s a matter of getting out of debt in 1-3 years, and the person is very young, losing the opportunity to invest in retirement for those years may not be that significant. But if someone is on the older side or will take many years to get out of debt, I think losing the opportunity to invest for retirement during those years you are paying back debts can hurt you. I look at it as another expense. Just like I wouldn’t stop paying my rent while trying to get out of debt, I wouldn’t stop sending money to a mutual fund each month for my retirement.

  • very good ideas. I learned a few that I had never thought of before.

  • mrs spock says:

    Good advice! I would add, as a nurse who telecommutes from home for a pharmacy benefit manager, working from home is not the same as staying at home. In order to do my job as required, I cannot take care of my son at the same time. I can’t be on the phone with a physician’s office or patient and have a toddler crying in the background. It makes our family life much, much easier, and gives us 2 more hours in the day since I am not commuting- but my son still goes to day care.

  • Melissa says:

    I would love to get some info on how to get your blog/website making money for you.

    I’m fairly new but would love ANY info 😀
    I already know about Adsense and Amazon.

    Thanks in advance!

  • lib says:

    Mrs. Spoke,
    I would love more information on who you work for as a pharmacy benefit manager. Thanks!

  • Elizabeth says:

    I would also love to find out more information about creating a successful and money making blog. (My blog is

Money Saving Mom® Comment Policy

We love comments from readers, so chime in with your thoughts below! We do our best to keep this blog upbeat and encouraging, so please keep your comments cordial and kind. Read more information on our comment policy.

Leave a Comment

Your email address will not be published. Required fields are marked *