Unfortunately, the reality is that no matter how much these figures have risen over time, stay-at-home moms do not see a single cent of this salary. Household labor is invisible labor. Our GDP, which is the #1 economic indicator does NOT account for all of the work, time, resources, and money that goes into managing a household.
So my advice for all the women (and men) out there that have not completely ruled out having children is to start paying yourself early on. Let the power of compound interest create a salary for your future self. I know, as a young 22-year-old, children were the last thing on my mind, but thinking and planning about future events that have a high probability of happening (i.e. having children) can allow you some freedom later on.
Before you become someone else’s caretaker, set money aside for the sole reason to have it as a cushion for when and if you decide to leave the workforce to care for others. A great option is contributing to a ROTH IRA. It has some income limits that you can read about on the IRS website, but in general, it is a post-tax savings vehicle, which means you’ve already paid taxes on it and your earnings grow tax-free (there are age and withdrawal restrictions). If invested properly, it can grow significantly. While the name IRA, which stands for Individual Retirement Account, has the word “retirement” in it, it has a fairly flexible set of qualified withdrawal options. Currently, the max you can put in for 2024 is $7000. It doesn’t seem like much, but it adds up over time especially if you start early.. You can open and contribute to an IRA as a single individual or as part of a married couple filing jointly. The requirement is that you just need to have taxable compensation.
So, if and when you do decide to leave the workforce for some time, you can continue to contribute as a means of paying yourself or as a continuation of your retirement savings plan. One of the requirements for the IRA is earned income. Because you will be out of the workforce without pay, if you are married filing jointly, you can use your partner’s income to fund your IRA. This is called a Spousal IRA, but it’s not a separate IRA account.
$7000 a year doesn’t seem like much and if we break that down into days, that’s around $19 a day, but it’s something and a start to compensating yourself. No, it’s not going to be the six-figure salary quoted, but it’s an exercise in ensuring a secure financial future for yourself. This is especially important as women tend to live longer and having money in your name can provide security and confidence.
Leave a Reply