BOSTON (TheStreet) -- Ask any stay-at-home mom or dad and they will surely tell you that what they do is as challenging as any full-time job. And it comes with an additional challenge: Creating and sticking to a savings plan for their retirement.
By forgoing a regular paycheck, these folks miss out on important company benefits, including an easy-to manage retirement plan and tax-deferred company matches. Because benefits are calculated on your highest 35 years of earnings, Social Security benefits may also take a hit if you decide to stay at home.
Piggybacking on a spouse or partner's 401(k) plan is often the only retirement savings the stay-at-home set think they can count on. It is important, however, to focus more on their own ability to save and build a personal fund.
Sande Taylor, a Miami-based consultant for (SCHW) Schwab, says having a personal retirement plan is crucial for those in this situation, offering security and a supplement to whatever other savings might be mapped out.
Increasingly, the unemployed half of a household is the one taking charge of the family budget, Taylor says.
"In general, the stay-at-home parent is handling the household finances, so it is becoming even more common for them to say that they need to plan for retirement and have their own income whether or not a spouse or significant other does," she says. "Recognizing the need to save for retirement is the most important first step."
The most direct vehicle for this situation is to establish an IRA account, in particular what are commonly referred to as a "spousal IRA" structured so contributions can be made from one half of a married couple to the other. Depending on your financial situation, these contributions can be made to either a traditional or Roth IRA. Contribution limits, this year, were $5,000 for those under the age of 50 and $6,000 for those who are older.
The challenge is that these accounts obviously won't have the automatic features, payroll deductions or company matches a sponsored plan would have, Taylor says.