Explain to me the financial risk of SAH if partner is a high earner

[Anonymous]

Anonymous wrote:

Anonymous wrote:Keep your job.
My DH makes 1.6m and I make 190k and I keep my job. It’s just too risky.
And you are at a much higher risk of divorce since this is a second marriage.

You don’t trust your husband.

Divorce brings up the worst on people. You hold an empty insurance policy thinking husband is forever and his salary is your guarantee. No he’s not

[Anonymous]

Anonymous wrote:Op, if you decide to do this, at minimum you should put in 7K for ROTH per year plus whatever the match amount 401k you would have been getting through work under your name! Basically pay yourself first and continue to save for retirement as you would have been if you were to continue to work.

You can't put money into a Roth if you don't have earned income. And from a tax perspective it's dumb to put money in a Roth if you are at a high tax bracket.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op, if you decide to do this, at minimum you should put in 7K for ROTH per year plus whatever the match amount 401k you would have been getting through work under your name! Basically pay yourself first and continue to save for retirement as you would have been if you were to continue to work.

You can't put money into a Roth if you don't have earned income. And from a tax perspective it's dumb to put money in a Roth if you are at a high tax bracket.

Besides, what this $7k annually give her ??

[Anonymous]

The answer to this question entirely depends on your personal risk tolerance. Every poster is responding based on their personal world-view and comfort level.

Are there SAHMs who have been screwed over financially from divorce? Sure. Are there WOHMs whose marriages fell apart bc of conflicts over division labor? Yep.

Marriage and family is all about entanglement -- and that comes with all sorts of financial and emotional risks regardless of whether you are working or not working. How risky it is to you and how much you will let that risk dictate your life choices is up to you and your spouse.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op, if you decide to do this, at minimum you should put in 7K for ROTH per year plus whatever the match amount 401k you would have been getting through work under your name! Basically pay yourself first and continue to save for retirement as you would have been if you were to continue to work.

You can't put money into a Roth if you don't have earned income. And from a tax perspective it's dumb to put money in a Roth if you are at a high tax bracket.

Wrong. There’s such a thing as a spousal IRA.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op, if you decide to do this, at minimum you should put in 7K for ROTH per year plus whatever the match amount 401k you would have been getting through work under your name! Basically pay yourself first and continue to save for retirement as you would have been if you were to continue to work.

You can't put money into a Roth if you don't have earned income. And from a tax perspective it's dumb to put money in a Roth if you are at a high tax bracket.

There’s a spousal IRA Roth. I’ve been a SAHM for a decade and have been contributing to it forever.

[Anonymous]

I was a SAHM for 10 plus years with a high earning spouse and unless you have significant assets and investments in addition to the income, I would not do this! It is very difficult to maintain the same standard of living in two households in expensive areas if you are not working. Every woman I know in this position was not able to maintain the costs of the marital house, taxes, etc. even with generous child support and alimony.

[Anonymous]

Anonymous wrote:I was a SAHM for 10 plus years with a high earning spouse and unless you have significant assets and investments in addition to the income, I would not do this! It is very difficult to maintain the same standard of living in two households in expensive areas if you are not working. Every woman I know in this position was not able to maintain the costs of the marital house, taxes, etc. even with generous child support and alimony.

Yes, one of my kid's friends goes to her mom's modest townhouse during the week and her dad's mansion (with chef, nanny etc.) during the weekend.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There is no way I would advise either of my children (DD or DS) to stop working if they had a wealthy spouse. Not only for the financial aspects but also for their own sense of self. Life is just too uncertain.

Not everyone gets fulfillment and meaning from working for the man!

Which man ?

It's an expression. You've never heard the expression "working for the man?"

Are you ESOL or just a 'tard?

You didn't get the irony. You still work for the man when you're home. It's just all your investment is non-diversified - it literally gets invested in one man. And it's up to him how to use your investment. You could do that, or instead "diversify" and have more options in case he misuses your trust

You can always point to examples where abuse of spousal trust supports your position, but it's still a pretty jaded world-view that reduces family life to a commodity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I was a SAHM for 10 plus years with a high earning spouse and unless you have significant assets and investments in addition to the income, I would not do this! It is very difficult to maintain the same standard of living in two households in expensive areas if you are not working. Every woman I know in this position was not able to maintain the costs of the marital house, taxes, etc. even with generous child support and alimony.

Yes, one of my kid's friends goes to her mom's modest townhouse during the week and her dad's mansion (with chef, nanny etc.) during the weekend.

Moms house sounds much better to me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op, Im considering the same question - DH hit $2+M this year and I make $200k. We have three young kids. I have higher earning potential (could probably get to $350k), but then we would both have “big” jobs and no one would be with the kids. Obviously not what we want, so Im figuring out how to SAH and feel comfortable with the risk.

DH offered a post nup, if that would be helpful, as we have been discussing my fears about quitting my job. I appreciate that we can talk about it, and I truly think DH is not a jerk, so I think he would do right by the kids if we did divorce (they are in private school, have a nice lifestyle). However, while we have foot savings/retirement, we expect it to take 7 more years to hit our “number” for early retirement, so divorce before then would be challenging.

I think we have a strong marriage, I think we have good communication, and we have both been willing to work with a therapist in the past, so I don’t have active fears of divorce, but it’s hard to be financially dependent on someone else after having been independent for so many years.

I think I will end up quitting, and one of my requirements will be that all of DH’s income gets out in our joint account so I have access to the funds all the time, and that I manage all the money. I think DH will be fine with that, and my plan is to set aside an amount into my own account each month so I have my own nest egg.

We also have DH with life insurance in the amount of our “number” for retirement, so if he died unexpectedly I wouldn’t have to worry about working immediately (or maybe ever). DH also has disability insurance for 60% of his earnings.

DH LOVES his job. I wouldn’t even consider quitting if DH didn’t enjoy his work - he seriously get energy from working. I’m happy for him that he makes a lot doing something he loves. He doesn’t always love the long hours, but he loves the majority of the work he does.

Finally, we are living a nice lifestyle, but our expenses are around $350K per year (obviously need higher gross income to support that). So we continue to live below our means, so in the instance of divorce/disability/death, there is no need for a significant lifestyle shift.

What ? His income is NOT coming to joint accounts already and you are considering to quit? Please, don’t ! And people who rely on life insurance - be mindful the beneficiary can be changed after divorce. Even if the court mandate him to maintain it (which is hard to get), he can change beneficiaries against that ruling. Ex wife will get embroiled in a lengthy dispute with insurance companies if he dies

+1000000. I do not know why women even allow this. This is a red flag.

DP (and an attorney). We have our paychecks deposited into our personal checking accounts and transfer to our family checking as needed to pay bills. (Literally I tell DH to transfer $X to pay for Amex or something.) I personally do it so I don’t have to have MY check deposited into a joint account and at risk if something were to happen. I’ve heard too many stories of men cleaning out joint accounts.

So basically women do it to protect their own paycheck.

I also have $20k in my own savings + two credit cards that I had before we married. So if catastrophe were to ever strike, I would have access to lord of cash/credit quickly.

And like PP, I make $200K+, could probably get to $350k if I really tried, and have DH who makes mid to high 7 figures.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I was a SAHM for 10 plus years with a high earning spouse and unless you have significant assets and investments in addition to the income, I would not do this! It is very difficult to maintain the same standard of living in two households in expensive areas if you are not working. Every woman I know in this position was not able to maintain the costs of the marital house, taxes, etc. even with generous child support and alimony.

Yes, one of my kid's friends goes to her mom's modest townhouse during the week and her dad's mansion (with chef, nanny etc.) during the weekend.

Moms house sounds much better to me.

Sure. But you’re not a teenager.

[Anonymous]

Anonymous wrote:I was a SAHM and was plunged into poverty immediately upon separation. Didn’t get retirement, didn’t get alimony, nothing. Don’t be me. Nothing is guaranteed.

Same. And ex went for a 50/50 schedule to avoid child support. Hired childcare or had latest girlfriend do it.

[Anonymous]

Anonymous wrote:The way I've seen this play out is that the high earner spouse limits the funds that the lower earning spouse has access to during the divorce, then they hire a shark and slow the process down, so it could take years for c/s and alimony to be decided and during that time the low-earner is also racking up high legal bills. Additionally, I know a number of cases where the high earner threatened to pursue full custody with their endless resources and got the low-earner to settle for less in exchange for 50/50.

This does happen.

OP, keep your career going and viable.

That kind of disparity often seems to lead the working partner into affairs with people he feels he has more in common with. Your assumptions about alimony and child support are unrealistic these days.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op, Im considering the same question - DH hit $2+M this year and I make $200k. We have three young kids. I have higher earning potential (could probably get to $350k), but then we would both have “big” jobs and no one would be with the kids. Obviously not what we want, so Im figuring out how to SAH and feel comfortable with the risk.

DH offered a post nup, if that would be helpful, as we have been discussing my fears about quitting my job. I appreciate that we can talk about it, and I truly think DH is not a jerk, so I think he would do right by the kids if we did divorce (they are in private school, have a nice lifestyle). However, while we have foot savings/retirement, we expect it to take 7 more years to hit our “number” for early retirement, so divorce before then would be challenging.

I think we have a strong marriage, I think we have good communication, and we have both been willing to work with a therapist in the past, so I don’t have active fears of divorce, but it’s hard to be financially dependent on someone else after having been independent for so many years.

I think I will end up quitting, and one of my requirements will be that all of DH’s income gets out in our joint account so I have access to the funds all the time, and that I manage all the money. I think DH will be fine with that, and my plan is to set aside an amount into my own account each month so I have my own nest egg.

We also have DH with life insurance in the amount of our “number” for retirement, so if he died unexpectedly I wouldn’t have to worry about working immediately (or maybe ever). DH also has disability insurance for 60% of his earnings.

DH LOVES his job. I wouldn’t even consider quitting if DH didn’t enjoy his work - he seriously get energy from working. I’m happy for him that he makes a lot doing something he loves. He doesn’t always love the long hours, but he loves the majority of the work he does.

Finally, we are living a nice lifestyle, but our expenses are around $350K per year (obviously need higher gross income to support that). So we continue to live below our means, so in the instance of divorce/disability/death, there is no need for a significant lifestyle shift.

What ? His income is NOT coming to joint accounts already and you are considering to quit? Please, don’t ! And people who rely on life insurance - be mindful the beneficiary can be changed after divorce. Even if the court mandate him to maintain it (which is hard to get), he can change beneficiaries against that ruling. Ex wife will get embroiled in a lengthy dispute with insurance companies if he dies

+1000000. I do not know why women even allow this. This is a red flag.

DP (and an attorney). We have our paychecks deposited into our personal checking accounts and transfer to our family checking as needed to pay bills. (Literally I tell DH to transfer $X to pay for Amex or something.) I personally do it so I don’t have to have MY check deposited into a joint account and at risk if something were to happen. I’ve heard too many stories of men cleaning out joint accounts.

So basically women do it to protect their own paycheck.

I also have $20k in my own savings + two credit cards that I had before we married. So if catastrophe were to ever strike, I would have access to lord of cash/credit quickly.

And like PP, I make $200K+, could probably get to $350k if I really tried, and have DH who makes mid to high 7 figures.

This is a dumb rationale. If something happens you can just have the employer deposit into a different account going forward. Unless you make more than your DH, then you’re stupid to think this is protecting you.