Women Are Beating Men at Retirement Savings

Sort of.

Jon Nazca / Reuters

In the U.S., the average woman is expected to live five years longer than the average man—a fact that leads to the financial advice that women should probably save more for retirement.

A new white paper from Vanguard finds that not only are women overall 14 percent more likely than men to participate in workplace-savings plans, women are crushing men in participation rate at every income level. For women earning less than $100,000, the participation rate is 20 percent higher than that of men.

401(k) Participation Rate by Income and Gender

But it’s not all good news for women in the retirement-savings gender gap: While women participate in retirement-saving plans at a higher rate, men still have way more retirement savings due to higher wages. In Vanguard’s study, men have average and median account balances that are 50 percent higher than that of women’s. When Vanguard controlled for the gender pay gap by comparing account balances of the same incomes levels, the numbers converged—but not at the highest income levels where they attribute the difference to men having been at those high wages for much longer than women.

Data from Fidelity’s 13.6 million participants tell a similar story: While men have an average 401(k) account balance of $98,700, women lag at $67,400. In Fidelity’s data, women also are behind in how much they are saving per year and the average percent of their salaries they are contributing. The Fidelity data has a bright spot though: Women earning less than $150,000 have more saved in their retirement accounts than men, perhaps an inverse of Vanguard’s higher-end disparity—this bottom bracket includes women who have been there for a long time.

So while women are better retirement savers than men, they’re not saving more on the whole due to wage disparities. And with women living longer, this means less to live on until the gender pay gap closes.