Top 10 Retirement Strategies for Women

For women who are in their 20s, it is never too early to start planning for retirement. By taking advantage of the ample time you have, you can create a sizeable retirement portfolio and increase the chances of financial security in your golden years. Here are the top 10 retirement planning strategies for women:

1. Estimate how much retirement income you will need. Consider your career and how long you expect to work. The IRS publishes life expectancy tables in Publication 590, titled Individual Retirement Arrangements (IRAs), which provide estimates of how many years you should plan for when saving for retirement.

2. Enroll in an employer-sponsored retirement plan. Most employers offer retirement savings plans, such as 401(k) plans, and will match a percentage of the contributions made. Obtaining free money is a good reason to make regular contributions to your retirement plan.

3. Start an IRA. Individual Retirement Accounts (IRAs) are offered through various banks and pay a yearly interest rate. IRAs also impose penalty fees for early withdrawal, which should prevent you from cashing out of your account until you are of retirement age.

4. Pay off your long-term debt. Pay off long-term debts such as student loans and mortgages. Maintaining these debts can prevent you from saving as much money as you would like for retirement. You also don't want to retire and still have a mortgage or other long-term debt to pay off.

5. Have your husband take the joint and survivor annuity. If you are married and your husband has a pension plan, have him select the joint and survivor annuity option in lieu of a lump sum payment. This provides an ongoing income for you if your husband passes away.

6. Diversify your assets. Do not rely solely on a mutual fund or a savings account for retirement income. Invest your capital in several different areas, including savings, stocks, funds, and even real estate. This increases the chances of one or several investments making a significant return for you.

7. Maximize your Social Security benefits. Women's Social Security benefits are often 25% less than men's because of their work history. To prevent this from happening to you, maximize your earnings now. This is especially important if you will take time off to start a family or care for a family member, such as an ailing parent.

8. Invest aggressively. Women often invest their capital in conservative mutual funds or low interest-bearing CDs. This results in them losing out on growth stocks and other profitable investment opportunities.

9. Consider retirement savings as an expense. Do not look at retirement planning as something optional that can be delayed until you are earning more money. Set aside a portion of your earnings for retirement today, and earmark retirement savings as an expense that needs to be paid regularly.

10. Improve your health. Long-term care expenses can drain even a sizeable retirement portfolio. Takes steps to improve your health and, if applicable, your spouse's health. In this way, you can look forward to enjoying your golden years.