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Help Mom Retire

The Motley Fool crew is no ship of fools. We're putting Mom first, and so should you. Check out all of the Fool's Mother's Day articles.  

She'll never stop being your mom, but that overworked lady who has cooked, cleaned, laundered, and worked for decades really wants to quit and put her feet up someday.

Motherhood sometimes means that everyone gets attention except Mom. But when it comes to retirement, Mom, you need to be a little bit selfish. Your kids will thank you when you don't have to move in with them later.

Just knowing you need to feed and nurture your retirement doesn't necessarily make it easier. It can be extra-challenging for some women to accumulate a comfortable retirement nest egg. You may have some gaps in your employment history -- years you left work to take care of children or other family members. That could mean gaps in your retirement funding.

You're also more likely than men to do part-time work or take jobs that don't offer retirement benefits. Maybe you've cobbled together several types of work -- or become self-employed -- in order to keep your schedule flexible. Then, when you mix in the fact that you can expect to outlive the man in your life (if you have one), you've got a recipe for a long and potentially less-than-comfortable retirement. Here are some ideas to overcome these challenges and make sure you're not working your fingers to the bone forever.

Short gaps
A few rounds of maternity leave, plus any absences to take care of ailing family members, and a woman can suddenly find herself accumulating at least a year or two of job absences. The gaps often come at a time when younger women most want to take advantage of the long stretch before retirement to build the foundation of their savings.

You can make up for these shorter losses by catching up while you're back at work. First, get very familiar with the rules of your workplace retirement plan. Find out whether you can immediately restart your contributions when you return to work. Then, consider socking an extra few percent of your salary into your 401(k), either before or after you take leave, to make up the difference.

Longer gaps
If you're planning to be away from work for more than a few months at a time, do some more serious planning. Here, it again pays to know the rules of your retirement plan, particularly those determining when you've vested and become eligible to claim your full benefits. If it's possible to plan your entries and exits to squeeze every penny you can from your workplace plans, then do it.

If you're not working, and you're married to a working husband, you can probably still make a contribution to a traditional IRA or a Roth IRA. Known as spousal IRAs, these accounts give you the same contribution limits as if you were working. Your deposits may even be tax-deductible, depending on your household income, if you save in a traditional IRA.

If you've had long stretches out of the workforce and you're returning to the job later in life, take a close look at the so-called "catch-up" rules for anyone age 50 and older. This year, the special rule lets you put an extra $1,000 in your IRA and an extra $5,000 in your 401(k).

Part-time work
If you're not a full-time worker, odds are that you don't have access to the retirement plan at work. In that case, an IRA may be your best retirement friend. If you're married, consider taking greater advantage of your husband's retirement plan, too. Boost his 401(k) contribution to set aside any extra money that you would have saved yourself, if you had a 401(k) at your fingertips.

Being self-employed
The self-employed have a pretty good range of options when it comes to saving for retirement, such as IRAs specifically designed for those venturing out on their own. You can use them in addition to your regular IRA, and they can be a great way to save a lot of money. Take a look at the two most common flavors, known as SEP IRAs and SIMPLE IRAs, and see if one might be a good vehicle for you. A number of discount brokers, including Schwab (NYSE: SCH  ) , TD Ameritrade (Nasdaq: AMTD  ) , and E*Trade (Nasdaq: ETFC  ) , offer accounts for the self-employed.

Once you've decided where to save, it's time to save carefully. Without a lot of wiggle room in your finances, it will pay to keep a sharp eye on your investments and your fees. You can get help making sure you're getting the most out of your retirement savings by reading the Rule Your Retirement newsletter free for 30 days. Print it out, run a hot bubble bath, ignore the kids, and dream about your retirement for a few minutes.

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Fool contributor Mary Dalrymple does not own stock in any company mentioned in this article. She welcomes your feedback. The Motley Fool has a lathered-clean disclosure policy.


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