Women Versus Men Saving in 401(k) Plans

By Erik H. Nelson on January 22, 2021

Are women better savers with their 401(k) accounts than men?

Research conducted by the Vanguard Group suggests that woman are, in fact, superior savers to men.

Let’s take a look at the findings:

At first glance, it appears that men are better savers due to the fact that overall, men’s account balances are more than 50% larger than women employees.

When you control for income, however, women save more in 401(k) plans or other defined contribution plans.

For example, women who earn less than $100,000 per year have workplace retirement plan participation rates that are between 11 and 17 percentage points higher than men.

Investing Risks:  Men vs. Women

Despite the common belief that women are less likely to take investment risks than men, the Vanguard study revealed that both genders invest similarly when it comes to the percentage of stock exposure in their defined contribution accounts.  Average equity allocations are 75% for women and just one point higher for men.

There is a difference though in the way men and women invest in equities.

Women are more likely to invest in target-date funds, with 64% percent of women’s portfolios invested in target-date funds compared to 57% for men.

Target-date funds often represent the most simplified investment strategy for retirement savings because they provide a diversified mix of stocks and bonds that automatically rebalances over time.  This is a hands-off approach that ensures that the closer an investor gets to retirement, the more conservative the mix of mutual funds get.

Women participating in workplace retirement plans are also more likely to invest in index funds than men.  Seventy-two percent of the equity exposure is in index funds for women and 68% for men. Index funds are also a hands-off, passive investment strategy that invests in a broad collection of funds that seek to track a particular market index (i.e., S&P 500, Dow Jones, NASDAQ, etc.).

Men vs. Woman Account Balances

Although women are more likely to save in workplace plans, men have bigger account balances largely due to higher wages. The average account balance of the Vanguard male participants was $118,131, while the average account balance for women participants was $78,437.  The median account balance for men was $33,573, versus $19,823 for women. The study finds that as income between men and women converge, so do average account balances.

Bottom Line:

Here are the bottom line conclusions from the Vanguard study:

The Vanguard data suggests that women and men may be different when it comes to their behavior around retirement plan savings.  Women are more likely to participate in these plans, and when they participate, they save more on average, as well.  Women are also more likely to use professionally managed or passive allocations than men, although, on average, men and women take very similar levels of equity risk and hold similar types of portfolios.  However, men have overall higher wealth accumulation than women largely due to higher wages.

Where the Data Came From

Vanguard drew the research data from workplace plans that use Vanguard for its recordkeeping.  The average tenure for women was nine years and ten years for men.  The average worker age was 43.


Source: Young, Galina and Young, Jean A. Women versus man in DC plans. Vanguard, January 2019,


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