Women Are Saving More But Have Saved Less

Nobody said saving would be easyWhat’s in your wallet 401(k)? Apparently, if you’re a lady, you’re more likely to be saving for retirement — even if you’re not earning that much to begin with.

Women earning between $20,000 and $40,000, for example, have saved an average of $17,300 in their 401(k), as of the year ended Sept. 30, 2014. Men in that income range have an average of $15,200 in their account. Fidelity’s data are based on 13 million accounts.

One reason for the gap is simple: Women joined their employer’s retirement plan at higher rates, on average, in 2013 than men making comparable salaries. And they contributed 6 percent to 12 percent more, on average, than men, according to separate figures from Vanguard Group Inc.

Men aren’t saving as much proportionally but, because of a glitch in the system that works in their favor (patriarchy), they have more total:

If you remove the income filter and just look at gender, though, women have less saved than men. Their 401(k)s hold $73,100 on average, compared with $108,800 for men. That difference is less about women and their savings habits than it is about women and wages. The average female worker in the U.S. makes less than her male counterpart, and so has less money to defer in retirement accounts.

Hmph. Ok but still, fellas, what’s holding you back from contributing more? 

I should note here that I hate gender essentialism. “Men drive like this, women drive like that!” “Men can only see things that are moving, because they used to hunt buffalo, whereas women can only see things that are stationary, because they were gathering berries, so that’s why women can find things in the fridge.” It’s reductive and silly.

If the facts underlying this study are true, though, there does seem to be a small but potentially interesting gender divide in how we save. Do women save more in retirement accounts because they know they’ll earn less, on average, over the course of their lives, and also live longer? Do men worry about it a bit less because they have more of a cushion?

Are women more conditioned to Think About The Future and Be Prepared, whereas men are more conditioned to Live in the Moment and pretend they’re immortal so that society can send them off to war as needed?

Are you influenced in how you save by things like gender, do you think? Or does it honestly not matter?

In case you need a refresher, this was the advice from US News on how to max out your retirement accounts in 2014.

Most workers can contribute up to $17,500 to a 401(k), 403(b) or the federal government’s Thrift Savings Plan in 2014. To max out this type of retirement account, you would need to contribute $1,458 per month or $729 per paycheck if you are paid twice per month. For someone in the 25 percent tax bracket, contributing the maximum will save you $4,375 in federal income taxes. Income tax won’t be due on your 401(k) contributions until you withdraw the money from the account. The contribution limits are adjusted annually to keep pace with inflation. “Adjust your contributions each year on the 401(k) site, and work with your [human resources] department to make sure that you are maximizing it,” says Clarissa Hobson, a certified financial planner for Carnick and Kubik in Colorado Springs, Colo.

There will be new info for 2015, naturally, and we’ll share it here.

And if you’re ready to begin saving seriously, Money Under 30 recommends starting with two simple rules:


  • If your employer matches 401k funds, contribute enough to get the full match. Do this first. Even if you’re in debt. Even if you don’t put in a penny more.
  • Next, if you can contribute to a Roth IRA, work on contributing the full $5,000 a year to that account before you contribute elsewhere.





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