12 Retirement Strategies for Women

Editor's note: This story has been updated since it originally was published.

Women and men have the same financial opportunities (and risks), the same vehicles for saving, investing and borrowing, and are subject to the same rules. Yet their circumstances -- and their choices -- can be very different. This divide is particularly striking when it comes to preparing for retirement.

Put Your 401(k) Back to WorkWomen and Money6 Things to Know About Your Spouse's Finances10 Ways Moms Can Make the Most of Their Money

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But as women there's no point in feeling sorry for ourselves. Women aren't victims. We're independent individuals who make decisions about our work, our lives and our family's lives that have financial consequences. Now that we know where we stand and what we're up against, there's plenty we can do to pump up our retirement kitty. Use the checklist below to identify the strategies you can take now.

1. Start your own retirement account.

Small amounts put aside when you're young grow into great gobs of cash when you're older. Take the case of two individuals -- one who saved $3,000 a year in an individual retirement account between the ages of 20 and 30 and then stopped, versus another who began saving at age 30 and faithfully contributed $3,000 each year until retirement at age 65. Assuming a 10% annual return, the worker who started saving earlier would accumulate more than $1.5 million compared with just over $900,000 for the worker who started later.

Sign up for your employer's retirement plan, and aim to contribute at least enough to qualify for any employer match. You can't afford to turn down free money. And never cash out your company plan if you switch jobs. Not covered by an employer plan? Open your own IRA or Roth IRA.

2. Always keep a portion of investments in stocks.

Allowing for calculated risk is important. Worried about preserving their assets, women often invest too timidly. No matter what your age, keep a portion of your investments in stocks. One rule of thumb is that the stock portion of your portfolio should equal 100 minus your age -- or 70% in the case of a 30-year-old, for example, or 50% for a 50-year-old.”

3. Put your retirement savings first -- before the kids' braces and college tuition.

In a survey by Country Insurance & Financial Services, 49% of the mothers interviewed picked college as their top savings priority compared with 39% of fathers, who were more likely to choose retirement. Moms, the dads got it right on this one.

4. Open a self-directed retirement plan.

This applies to women who may have self-employment income or work part-time as well, even if it's a sideline job making crafts or working as a personal trainer. Depending on your situation, you can choose among a SEP IRA, a SIMPLE IRA or a solo 401(k). [page break]

5. Open a spousal IRA.

Even if you're a stay-at-home mom, you should always have, and control, your own retirement savings. As long as your husband has a paying job, in 2009 he can contribute up to $5,000 to an IRA or Roth IRA for you, besides squirreling away $5,000 in his own IRA. That also lets the two of you double up on your contributions as a couple.

6. Check your Social Security record.

See how much you're entitled to in benefits. If you're employed, the government will send you an annual statement showing how much you've paid into the system and your estimated benefits when you retire. Read it, and report any errors to the Social Security Administration (800-772-1213; www.ssa.gov). You can collect whichever is larger: Benefits based on your own earnings record, or 50% of your husband's benefit, even if you've never worked.

7. Act on the catch-up provision.

If you're 50 or older, take advantage of the additional retirement contributions you're permitted to make in 2009 -- an extra $5,500 to your 401(k) or similar workplace plan and an extra $1,000 to an IRA. These catch-up provisions are especially helpful for women who entered the work force late, have a checkered job history -- or delayed saving to pay for braces or college tuition.

8. Elect a survivor's benefit.

Don't be too quick to give up your right to your husband's traditional pension. Electing a survivor's benefit reduces the pension your husband receives during his life, but you would continue to get payments after his death. If you don't expect to outlive your husband, or if you have a pension of your own or other financial assets, it might make sense to take full benefits during your husband's lifetime-especially if you won't need all the money and can invest any surplus.

9. Become a primary beneficiary.

Your husband's IRAs and 401(k)s should list you as the beneficiary -- not your husband's mother, his ex-wife or children from a previous marriage (unless you've agreed to such an arrangement). Remember, beneficiaries on retirement documents always take precedence over individuals named in a will.

10. For Divorcees: Negotiate for your ex's retirement assets.

When couples split up, their retirement savings may be their largest single asset. You aren't automatically entitled to a share of your husband plan, so make sure it's on the table when you negotiate a settlement. If your husband has an employer-based retirement plan, such as a traditional pension or 401(k), your lawyer must petition for a qualified domestic relations order (QDRO), which tells the pension-plan administrator how to divide the benefits between you and your ex-husband.

11. For Divorcees: Review your ex-husband's social security benefit.

As noted earlier, when you collect Social Security benefits, you can choose either your own benefit or 50% of your spouse's benefit -- and that's true even if you and your (former) spouse are divorced. To qualify, your marriage must have lasted at least ten years; both you and your ex-husband must be at least 62 years old; and the checks can't start until two years after the divorce. If you remarry, you lose the right to benefits based on your former husband's earnings (unless your second marriage also ends in divorce).

12. Claim widow's benefits from Social Security.

If your spouse was entitled to Social Security, you can collect widow's benefits starting at age 60, or 50 if you're disabled. As a widow, you can generally receive the greater of your husband's Social Security benefits or your own. And if you're 60 or older, you can remarry and still collect benefits based on your deceased husband's employment record. You can choose his full benefit; 50% of your new spouse's benefit; or your own benefit based on your work history.

One last point to make a baker's dozen: Don't rely on your husband, or any other interested party, no matter how loving, to take care of you. Take charge of your own retirement.

Adapted from Kiplinger's Money Smart Women (Kaplan, $15.95), by Janet Bodnar, editor of Kiplinger's Personal Finance magazine. Available at a 40% discount through the Kiplinger store.

"Other books, like Kiplinger's Money Smart Women by Janet Bodnar, avoid the patronizing finger wagging and stick to giving advice that women can really use -- like explaining when you can tap your Roth IRA to help with a down payment on your first house. You'll save so much money, you may decide to treat yourself to a latte. After all, you've earned it." -- Time magazine, April 16, 2007