Homeschooling is costly. Frugal homeschooling is a myth. There. I’ve said it. I’ve thought it for a long time, but here we are putting it out there in the open. Homeschooling is not cheap and anyone who says that homeschooling can be done cheaply or for almost nothing is not telling the entire story.
There is an expensive aspect to homeschooling that no one discusses. Why? Because it isn’t a pressing concern like choosing curriculum and finding a routine that works for your family. And it makes homeschooling an expensive proposition for many people when looked at the totality of life. I’m talking about the impact homeschooling has on your retirement savings.
Sacrificing Financially to Homeschool
We already know that many homeschooling families sacrifice a great deal financially to homeschool. One of the parents, usually the mother, leaves the workforce in order to be the primary homeschool parent. Unless the parent still in the workforce has an secure job with excellent benefits and income, there is a drop-off in the family’s standard of living. That’s simply a fact and a trade-off that couples make. They decide their children’s education, safety, and emotional well-being are more important than money. So they find ways to cut corners, make do with less, and forego many of the trappings of the typical middle class life.
But what isn’t discussed in homeschooling circles is the fact that homeschooling carries a huge financial cost over many years as it relates to retirement. It’s a cost we don’t fully see in the moment but that will become more apparent as the years pass. Most people don’t fully appreciate every aspect of the trade-off when they make these choices in the earlier stages of life.
But if we are going to be completely honest about the realities of homeschooling, we need to recognize and talk about the fact that making the choice to homeschool can have a potentially devastating impact on retirement planning and income.
Homeschooling Impacts Saving for Retirement
Forbes had an article a few years ago about the issues related to being a homemaker and retirement. In Homemakers Are Facing Their Own Retirement Crisis, they explored the challenges these women will face as they get older and have little to nothing saved toward their retirement. They may also have little to nothing accumulated toward Social Security under their own name, only their husband’s.
I believe the homeschooling situation is similar.
A mom with 3 kids spread 2 years apart is going to spend over 20 years homeschooling. If she has more kids and/or the gaps are greater, the time will be even longer. This choice takes many women completely out of the workforce in any meaningful way for most of their adult life.
For many of these women, homeschooling and leaving the workforce was never on their radar. I have interacted with so many women over the years who never, ever considered homeschooling until they saw their child completely crushed by the educational bureaucracy whether due to special learning needs, gifted/2e needs, or other individual factors such as safety and mental well-being. Unlike parents who approached the birth of their children with a homeschooling mindset, these women are encountering something they never anticipated personally, professionally, or financially.
Homeschooling Moms Working on the Side
In some cases, the couple might decide to have mom try to make some extra money on the side. I’ve already discussed at length the problems with trying to homeschool and run a business on the side in my post Thoughts on Motherhood, Making a Home, Homeschooling, and Working at Home. As I wrote in that post:
Balancing motherhood, homeschooling, homemaking, and owning a business is frankly next to impossible with small children. There is simply no way to do it all well unless you have a tremendous support system or you have the financial means to hire out some of your work. That is the only way it can be done without sacrificing your health by skimping on sleep.
Personally, I’ve come to the point I do not actively encourage moms with young children to pursue a business. I don’t suggest it to a young woman with little ones. I would not discourage a woman if she had made up her mind already. I will help her with knowledge I can pass along and I do in various groups I participate in. But I don’t suggest it.
The siren call of being able to do it all from home with the advent of the internet is so tempting and yet so much more difficult than most people realize. The reality is that most women who try to bring an income into the home in a side gig invest far more time than they get out of it financially. There are always those few who do (seemingly) spectacularly well and they become the beacon beckoning to other moms who want to have it all while still technically being at home. And I’m not going to argue that it can never be done. Only that it is very, very difficult and the number of women who succeed at a significant level are a very small number compared to those who are actively pursuing it and earning very little.
I do believe that pursuing a business often creates a lot of angst and frustration on the part of the mom. The more of a go-getter she is with gifts and abilities, the more challenging it is because she can almost never live up to her business vision or everything she is learning. With an online business like blogging, it never ends. Ever. There is always something to learn, something to update, something to improve. I wonder, in turn, how much frustration and negative feelings it creates between the mom and her children as she feels torn between doing what she knows she can do with her business if she only had more time and knowing she cannot.
So can it be done? Yes. But can most women do both well? No, they cannot.
And I’ve never heard anyone discuss mom working as a way to alleviate problems with retirement in the future. It is almost always about money for the present.
Kicking the Retirement Can Down the Road
The question of saving for retirement gets kicked down the road because the most pressing need is to help the children who need out of the school environment and into the home. Retirement planning is sacrificed because in the moment, homeschooling is either a necessity or a strong calling. But unless the spouse working outside the home makes an excellent wage and has an excellent retirement plan, homeschooling is going to create some significant financial loss down the road.
Unfortunately most people overestimate their ability play catch-up when their kids are grown. They also underestimate how much they will slow down as they age. Working full-time until age 70 sounds fine when you are relatively strong and young. Once you pass into your 40s and especially your 50s, you realize that working until 70 sounds not only much less appealing but even less doable physically. Add in the stress of needing to work as a senior citizen and it isn’t an appealing plan at all.
The Cost of Homeschooling to Retirement
So let’s look at what is lost by the mom who homeschools instead of working.
- Lost wages
- Lost retirement income
- Lost Social Security
- Lost savings
- Lost investments
- Lost compounding interest
These losses will amount to tens and even hundreds of thousands of dollars over a lifetime, depending on what the mother did before she came home to focus on homeschooling and parenting. There is a real, tangible cost to homeschooling that is going to be readily apparent in the decades to come.
What Should Homeschoolers Do to Prepare?
This post is not a plea for moms to stop homeschooling and get a job. Quite the contrary. I believe strongly in the importance of the mother being in the home if at all possible. I think children do best with a parent at home. That’s my opinion and there is certainly research to back that up.
We currently live in a culture where the average family income is $60,000 a year. But it takes $120,000 to live a middle class life that includes saving for retirement, saving for your child’s education, taking a family vacation each year, and setting aside money for emergencies. If the average family makes half of what is needed to actually live a middle class life, how is that family supposed to homeschool and prepare for retirement?
Now with the upheaval in education at all levels, we’re seeing at least a temporary surge in homeschooling. Will the move to homeschoooling accelerate in the months and years ahead? No one knows yet. If homeschooling becomes a major force in this country, we could see a push for recognizing the needs of homeschooling families.
Should the government give tax breaks for families with a parent at home full-time? Should homeschooling families get a tax break for undertaking the education of their children? Should homeschooling families get a break on their property taxes if they aren’t utilizing the schools? What if that money could be funneled into retirement savings instead?
I don’t know what the answer is. But the homeschooling community needs to be having an honest discussion about this beyond pointing to their children and saying, “This is my retirement plan.” That’s all well and good in theory, but that’s not a plan and it’s not fair to put that expectation on your children since they may have plans that don’t include caring for you in retirement. What if your “retirement plan” decides he’s called to foreign missions? What if your “retirement plan” flakes out and cuts off the family? While a multi-generational approach to retirement and family might be the ideal, it doesn’t seem like a real plan to me.
So where do we go from here?
The Social Security Administration has several benefit calculators: https://www.ssa.gov/OACT/anypia/index.html
It’s been a long time since I looked at what the SS benefits for a stay-at-home wife would be, but I believe it could be 50% of husband’s, or she can claim benefits based on her own work history. I had a number of working years before becoming a SAHM, and I may work outside the home again when the children are grown.
If my husband and his career were to go well until his retirement, and Social Security were funded to keep paying out full benefits, then we could retire on Social Security alone, with probably a higher standard of living than we have now.
But anticipating Social Security benefits paid out at 50%, not 100%, is the most optimistic that I can reasonably be for our generation.
Husband makes contributions to his 401k. That has grown over time, and has two more decades to grow before retirement. If the economy does decently well for the rest of our lives, then we could probably retire comfortably on that alone.
We’ve been developing side businesses which could provide income in retirement.
We’ve been investing in other tools and skills that we may be able to use in retirement to boost our standard of living.
Likewise, we’ve been working on being healthy now, as a foundation for good health in old age. The best tip I found in a book for adult children caring for elderly parents was: “Keep ’em healthy, and it’ll be so much easier to care for them!”
We may or may not be receiving inheritances from various family members; it’s not something that we can count on, but that may be one of the ways in which God provides for us.
Our children may help care for us in old age, in one way or another, if it is part of God’s plan. We are of course trying to leave an inheritance for them, rather than be a burden on them. Some of that inheritance, though, is the things that we are teaching them now, that will help them live lovingly, productively, and frugally.
We’ve been putting “treasures into Heaven” by giving to various people and ministries. We have not yet managed to outgive God.
Ultimately my retirement plan is Heaven, whenever I end up getting there. Until then, we’ve diversified our investments, and we plan to keep on doing what we can, with God’s help, until the end of this life.
I homeschool and we have followed the Dave Ramsey plan since 2008. I used to be running my own graphic design business and homeschooling. It was too much. My clients did not like my putting family first. I quit trying to do both 4 years ago and I am glad I made that decision! We are on Dave Ramsey’s baby step #3. We have a baby emergency fund and have no debt except the house, which is now on a 15 yr. loan. We have 14 years left to pay because we just did the refinance last year.
In 2008, we started an account with a company that is now my529.com to save for college for each of our kids. As new babies came along, we got them bank accounts and my529 accounts. We started each of their accounts with the minimum $5 required. Then we decided to set an automatic contribution to eaxh account of $1 a month. This gave our college-aged daughter $500 for, which went down to $400 when covid hit.
We are not investing yet because that is baby step 7. We would like yo be on baby step 7, but right now, our focus is on getting 4 months of expenses into savings.
I am doing my best!
Dave Ramsey’s baby steps has investing begin after step 3. The first 3 steps are get out of debt and build an emergency fund. Steps 4-6 are done at the same time.
4. Save 15% on retirement (invest)
5. Save for kids college (invest or cash flow)
6. Pay off house early
7. Build wealth and give. Assumes house is paid and you can put even more in investments.
This! Our current situation means we will have $150,000k in retirement savings, after homeschooling my four lovelies. So what options do we have, a rental suite, real estate investments, a duplex, a multiplex, stock market, cryptocurrency? Relocate to a cheaper community so we can be mortgage free now? All the above? If we relocate and pay off our mortgage now, we will have 750,000k in retirement savings, and if we get another rental (hard to do with no cash) we could have 1.5 million in retirement savings. BMO of Canada says couples now need 1.8 million to retire comfortably with the new cost of inflation. This is crazy making! I think it’s reasonable to put our kids into the public system in high school if it means we can have a better retirement because I’m watching my in laws and my parents struggle in retirement to cover all the expenses. It’s scary that I might have to take care of them soon when I can’t afford to take care of ourselves!
These are all difficult questions. We’ve opted to homeschool all the way through and hope we can sort out the financial part in time. You are far ahead of us financially and most Americans I personally know who homeschool. Most homeschoolers have made a lot of financial sacrifices in order to make it work while at the same time being robbed blind by our government during the past 20+ years.
I don’t give financial advice because I’m not qualified to do so professionally or personally.
I do know the entire financial system is already collapsing as I’m typing this. I write about that more on my other website. We’re living through one of the greatest monetary events in human history. The question of retirement right now is almost irrelevant at this moment because we haven’t seen what we are going to be living with on the other side.
Interesting. I’m a little more optimistic about the future, unless you count climate change…which I’m praying we can start to see some relief in the next 5 years. Ugh. What is your other website about finances? I’d love to read it, thanks! As to being ahead, we were luck enough to have a garage that we converted into a legal rental suite before my 1st turned 2 yrs old. Its been the reason why I’ve been able to stay home the past 14yrs. Now its not helping us pay for retirement, mind you. That came about because we had to fix our house (almost went bankrupt with an unfinished house) due to termites eating the entire foundation posts (post and pillar home)! Eep! We put an addition onto the house which helped offset the costs of a new basement, this increased our equity (I didn’t plan this part) which we then (many years later) used to buy into some public & private investments. It’s not going to be much, but $150K is more than we were planning on having to retire with.
Oh, my! I am so sorry about the termite damage! We think we have wood rot. We had to use diatomacous earth on Florida Carpenter Ants living inside the walls.
I’ve heard that carpenter ants love termites. Make sure you don’t have those too! Ugh.