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9 Smart Retirement Strategies for Women

Women and men have the same opportunities for saving, investing and borrowing, the same investments, and they 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.

Because women have longer life expectancies, they will probably have to provide for themselves in retirement longer than men. Yet women often earn less than men and participate in the workforce more sporadically. As a result, they tend to amass less in retirement savings. And women -- particularly unmarried women -- are less likely than men to say they are very confident about having enough money to live comfortably in retirement, according to the 2015 Retirement Confidence Survey from the Employee Benefit Research Institute.

But that doesn't mean women are destined to struggle financially in their later years. Use the following checklist to identify strategies you can implement now to improve your prospects for a secure retirement -- or perhaps improve your financial outlook in the retirement you're already enjoying.

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Start Saving ASAP

Small amounts put aside when you're young grow into great gobs of cash when you're older. Take the example of two people, one who saved $3,000 a year in an individual retirement account between the ages of 20 and 30 and then stopped, and another who began saving at age 30 and faithfully contributed $3,000 each year until retirement at age 66. Assuming an 8% annual return, the worker who started saving earlier would accumulate about $740,000, compared with about $560,000 for the worker who started later.

Sign up for your employer's 401(k) or similar workplace plan. You can contribute up to $18,000 in 2016 and 2017, but even if you can't contribute the maximum, aim to kick in at least enough to qualify for any employer match. You can also open a traditional or Roth IRA. If you are self-employed or work part-time, as many women do, you have even more choices, such as a Simplified Employee Pension (SEP), a SIMPLE IRA or a solo 401(k).

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Open a Spousal IRA

Even if you're a stay-at-home parent with no outside income, you can have your own retirement savings. As long as your spouse has a paying job, in 2016 and 2017 he can contribute as much as $5,500 to a spousal IRA or Roth IRA on your behalf, in addition to contributing to his own account. That lets the two of you double down on your savings as a couple, but it also gives you control over money of your own should anything happen to your spouse.

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Don't Fear the Stock Market

Studies show that women sometimes invest too conservatively, which can be counterproductive. By shying away from stocks, which have the highest investment return over time, you risk not building a big enough nest egg for retirement.

To feel more comfortable about the stock market, it helps to spread the risk by putting money in a broad-based mutual fund that invests in Standard & Poor's 500-stock index or even the total stock market. Increasingly popular are target-date funds, which are pegged to your retirement date and hold a mix of stocks, bonds and other assets that automatically becomes more conservative as that date approaches. Vanguard reports that women participants in the 401(k) plans it manages are far more likely than men to hold a target-date fund, and that men and women have almost identical investment returns.

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Get the Most From Social Security

Before you retire, sign up for a "my Social Security" account to keep track of your earnings record and get an estimate of your retirement, disability and survivor benefits. You can ultimately collect whichever is larger: benefits based on your own earnings record, or 50% of your spouse’s benefit (even if you have never worked outside the home).

Congress recently axed two popular strategies that helped married couples boost their Social Security benefits. But you still have ways to maximize your benefits as a couple and as an individual. For example, if you wait past full retirement age to claim benefits, you can earn delayed-retirement credits that boost your payout by 8% a year up to age 70. And if your spouse delays benefits, you'll qualify for a larger survivor benefit if you outlive him.

Divorced? If you're divorced, you may be entitled to Social Security benefits on your ex's earnings record. To qualify, you must have been married for at least 10 years and be at least 62 and unmarried. You can collect on an ex's record even if he hasn't applied for benefits, as long as your former spouse is at least 62 and you have been divorced for at least two years. If you remarry, you lose the right to benefits based on your former spouse's earnings (unless your second marriage also ends in divorce).

Widowed? 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 remarry at age 60 or older, you can still collect benefits based on your deceased spouse's employment record. If you are age 62 or older, you can choose the survivor benefit, a spousal benefit off your new spouse's work record or your own benefit based on your work history.

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Make Sure You Benefit From Your Spouse's Retirement Accounts

Your spouse's IRAs and 401(k) accounts should list you as the primary beneficiary -- not your mother-in-law, your spouse's ex-wife or children from a previous marriage (unless you've agreed to such an arrangement). Remember, beneficiaries on retirement documents and life insurance policies always take precedence over individuals named in a will. So it's important to review and update all of your accounts.

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Play Catch-Up

If you're 50 or older, you can take advantage of additional contributions to your retirement accounts. In 2016 and 2017, you can contribute an extra $6,000 to your 401(k) or similar workplace plan and an extra $1,000 to an IRA. Catch-up provisions are especially helpful for women who entered the workforce late, have a checkered job history, or delayed saving for retirement to pay for the kids' braces or college tuition.

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Get a Share of Your Spouse's Pension

If your spouse is eligible for a traditional pension, you have a right to receive a survivor benefit. Electing a survivor benefit will reduce the amount your spouse receives during his life, but you would continue to get payments after his death.

If you don't expect to outlive your spouse, or if you have a pension of your own or other financial assets, it might make sense for your spouse to take full benefits during his lifetime -- especially if you as a couple won't need all the money and can invest any surplus. But don't be too quick to give up your right to lifetime income.

Most 401(k)s and other defined-contribution plans also have protections for surviving spouses. Generally, a surviving spouse will automatically be the beneficiary of plan assets. A different beneficiary can only be selected if you have consented to the change and have signed a waiver, witnessed by a notary or plan representative.

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Getting Divorced? Negotiate Retirement Assets

When couples split, their retirement savings may be their largest single asset. You aren't automatically entitled to a share of your spouse's plan, so make sure it's on the table when you negotiate a settlement. If your spouse 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.


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Consider Buying Long-Term-Care Insurance

Financial advisers generally recommend buying LTC coverage in your fifties or early sixties to help pay for part of the cost of in-home, assisted-living or nursing home care. If you're married, a good strategy is to buy a shared-benefit policy that provides a pool of benefits either spouse can use. Buying as a couple also tends to even out the cost because rates are generally higher for women.

For those who are single, consider long-term-care insurance if it's offered by your employer. These policies usually offer a 5% to 10% discount, and workplace policies must generally charge women and men the same rates.

By Janet Bodnar