'Gendernomics' leads to less retirement savings for women

Because of the “wage gap,” women accrue smaller 401(k) balances on average than their male counterparts even though they typically invest a higher percentage of their salaries, a new study by investment firm The Vanguard Group Inc. has found.

The average 401(k) balance for women was $78,000 compared with an average balance of $121,000 for men, according to “The Gendernomics of Retirement Savings,” which tracked the savings habits of 1.3 million plan participants since 2000.

“Right off the bat, women demonstrate an inclination toward savings — they are 10% more likely to enroll in their workplace saving plans than men. And once enrolled, women across all income levels save at rates anywhere from 6% to 12% higher than those of their male counterparts,” according to a blog post about the survey published by Jean Young, a Vanguard senior research analyst.

The biggest disparity appeared among the highest earners, where there were far more male workers bringing in higher income, she noted.

“Put simply, wages help determine how much people save. The average wage for our male participants runs about 40% higher than women's, with men's wages averaging $107,000, while the average wage for our female participants is $77,000,” Ms. Young wrote in her blog.

But there may be other factors at play as well. On average, women work 12 fewer years over the course of their careers than men, often taking time off to raise children or care for a sick spouse or aging parents, according to the AARP Public Policy Institute.