1063. Stepping away from the workforce to care for family is meaningful work. But relying on a single paycheck can leave parents vulnerable. Host Laura Adams answers a listener’s question about transitioning to a one-income household. Whether you’re married or are domestic partners, you’ll learn strategies to create a strong financial safety net.
Key Takeaways
- Because a one-income family faces more financial risk, it’s important to build a liquid emergency cushion of at least six months of living expenses in an FDIC-insured high-yield savings account.
- Life insurance shouldn't just replace the earner’s paycheck; having a term life policy on the stay-at-home parent protects against the annual expense of childcare.
- Legally married couples filing taxes jointly can fund a spousal IRA up to annual limits for the non-working spouse.
- A working partner can gift funds for a non-working partner using a brokerage account in their name.
- A last will and testament (which names legal guardians for minor children), power of attorney, health care proxy, and living will ensure key decisions about your family’s future stay in your control.
- Accounts with named beneficiaries, like 401(k)s, IRAs, and life insurance policies, bypass probate and transfer directly to the named individual, making regular beneficiary audits critical after marriage, divorce, or childbirth.
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Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.
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