Men and women save for retirement differently. There’s a persistent and significant gender gap in the average retirement savings women have versus men, with women more likely to have nothing saved for retirement while men are over-represented among savers with the largest retirement account balances. Men and women have similar access to retirement savings plans, and women are more likely to participate than men. But men tend to contribute larger amounts and invest their savings with growth in mind. Let’s look at the differences in the retirement savings of women and men.
If you have questions about your retirement savings plan, consider reaching out to a financial advisor.
Retirements Savings: Women’s vs. Men’s Account Balances
Women are slightly more likely than men to have nothing saved for retirement. About 50% of non-retired women aged 55 to 66 have not set aside anything for retirement, according to the Census Bureau. Meanwhile, roughly 47% of men are in the same position.
The difference between the genders is larger when considering only people who have stocked their retirement nest eggs with $100,000 or more. Among men, 30% have accumulated at least this much in personal retirement savings, while just 22% of women have a similar amount.
Looking only at those who are married, the differences between men and women as retirement savers become narrower. In that group, 38.9% of men and 39.7% of women have no retirement savings. The group of married savers with $100,000 or more put away includes 36.4% of men and 34.2% of women.
Plan Participation Rates of Men vs. Women
According to a survey by T. Rowe Price of people who self-identified by gender, there’s no sign of a gender gap when it comes to access to employer-sponsored retirement savings plans. However, there are differences in participation rate, contribution percentage, and size and total account balances when comparing genders.
The investment company found that female employees were more likely than their male colleagues to participate in retirement savings plans. However, women typically contributed less.
One difference was found in contributions to savings plans measured as a percentage of their earnings. Including both employee contributions and employer matches, women’s median contribution rate was 11%. Men, meanwhile, made total median contributions amounting to 13% of their salaries.
Partly as a result of the higher percentage and partly because men earned higher median incomes, men contribute significantly larger amounts. The investment company estimated annual 401(k) contributions at $9,578 for men and $5,421 for women, a difference of 43%.
An even larger difference appeared when examining 401(k) plan account balances by gender. Men owned accounts with a median balance of $62,040, while women’s accounts had a median balance of $21,638, a difference of 65%.
Investing Behaviors of Men vs. Woman
The gender pay gap likely explains much of the difference in account balances and retirement savings between man and women. However, part of the difference in account size may be due to differences in the way men and women approach investing.
According to T. Rowe Price, women are less likely to hire a financial advisor to help them grow their retirement savings. They’re also more likely to rely on advice from friends and family when it comes to financial planning, and less likely to use workplace financial resources.
When Fidelity looked at retirement saving and investing practices by gender, it found that women were more likely than men to keep savings in cash rather than investing it for potential growth. The Department of Labor also reported that studies find women typically invest more conservatively, which can inhibit long-term portfolio performance.
Social Security Benefits
For most workers, Social Security benefits are an important part of financing their retirement. Here, too, women come up short compared to men. In 2022, the average monthly benefit for retired male workers was $2,020, according to the Social Security Administration. Retired women, meanwhile, averaged just $1,638 in monthly benefits.
There is one area of retirement funding where women’s numbers were noticeably higher than men’s, and that’s in Social Security survivor benefits paid to the spouses of deceased workers. Non-disabled widows received average monthly benefits of $1,714 compared to male widowers, who were paid $1,509.
Bottom Line
Understanding how the retirement savings women have versus men can help you examine your own habits. A gender-based retirement savings gap exists in several significant measures. Women nearing the age to retire are more likely than men to have nothing saved, and are less well-represented among people in that age group who have saved six-figure sums. While women are more likely to participate in workplace retirement savings plans, they contribute smaller percentages of lower earnings, are less likely to seek professional advice through a retirement advisor, and have smaller overall account balances.
Retirement Savings Tips
- To ensure you’re prepared for retirement, consider discussing your objectives with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- You can customize SmartAsset’s free, online Retirement Calculator to get an individualized answer to the question of whether you are on track for retirement.
- Curious if your current 401(k) contributions will meet your retirement needs? Use our 401(k) Calculator to estimate how much you’ll have in retirement at your current pace.
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