The Retirement Gender Gap: Why Women's Nest Eggs Fall Short

The Retirement Gender Gap: Why Women's Nest Eggs Fall Short

The answer seems obvious: The worker who is most diligent about saving for retirement should also be the one who ends up with the largest nest egg … right?

Not exactly. And the answer to who ends up with more savings in the end seems to fall along gender lines.

A new Vanguard analysis finds that women have an average 401(k) balance of $78,000, while men have an average of $121,000. This, despite the fact that women are more likely to enroll in their employer-sponsored retirement plans and typically put away a larger portion of their paycheck.


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So what’s behind the disparity? Perhaps the most significant factor is the wage gap. Among the investors surveyed, men earned about 40% more than women.

But interestingly, the savings gap seems to widen the higher up you go on the salary ladder. When researchers compared the account balances of investors by income level, they found that men and women seemed to save about the same amount in most income brackets—that is, until they looked at the highest earners (those making at least $100,000). According to Vanguard, among the wealthy, women are saving about $235,000, while men sock away about $291,000.

But there are other potential issues causing the retirement savings disparity, such as the fact that women are more likely to take time off to raise children or care for aging family members. In fact, according to the AARP Public Policy Institute, women spend, on average, 12 fewer years in the workforce than men do because of caregiving issues.

While it’s important to note that women may be utilizing other retirement savings vehicles, the fact that their 401(k) balances tend to be lower could be cause for alarm. That’s because women generally outlive men—and therefore need to account for a longer timeline in retirement.


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