Women generally sock away a larger share of their pay into retirement plans than men, yet they still hold smaller account balances, a new Vanguard analysis finds — a gap tied largely to pay differences and time out of the workforce. The figures underline how savings habits and structural factors together shape retirement readiness today.
Vanguard’s 2026 How America Saves report, which examined nearly 5 million participants across more than 1,300 workplace plans using 2025 data, shows the average balance for men at about $194,597 and for women roughly $146,476. At the same time, the study finds women are more likely to enroll in plans, contribute at comparable or slightly higher rates, and favor steadier, professionally managed investment options.
Pay and career interruptions narrow — but do not erase — the divide
One central reason for lower balances: earnings. Full-time working women still earn about 81% of what men do, according to the U.S. Department of Labor, which reduces the dollar amount they can save even when their contribution rates are similar.
Caregiving responsibilities also play a major role. Many women step back from work to care for children, elderly relatives or ill family members, forfeiting not only contributions but often employer matches and years of compound growth. A 2025 report from AARP and the National Alliance for Caregiving found that women make up the large majority of unpaid caregivers in the U.S.
Vanguard’s data show the imbalance shrinks when comparing savers with similar incomes. Among participants earning between $30,000 and $149,999, women’s average 401(k) balances are within about 10% of men’s. In the $30,000–$49,999 band, women’s average balance stood just above men’s — roughly $31,806 versus $31,288 — illustrating how income stratification strongly influences outcomes.
Different investment behaviors — and results
Beyond contribution levels, how people invest matters. The Vanguard report finds both sexes hold similar mixes overall — an average of about 6% in bonds and 3% in cash — but women allocate a larger share to target-date funds (about 50% of their assets) while men favor diversified equity funds more heavily.
Independent analyses echo a pattern: Fidelity’s review of millions of accounts found that, on average, women’s portfolios outperformed men’s by roughly 0.4 percentage points annually, and Wells Fargo’s 2025 research reported women tend to achieve comparable or better returns while taking less risk. Vanguard’s researchers say this likely reflects women trading less frequently and relying more on professionally managed options.
- 401(k) balances are higher for men on average, but contribution behavior favors women.
- Lower lifetime earnings and career pauses for caregiving are major structural drivers of the gap.
- Women’s heavier use of target-date funds and steadier investing habits correlate with slightly better risk-adjusted returns.
- At similar income levels, the balance gap narrows substantially, pointing to income as a primary factor.
Financial planners say another factor is cash held outside retirement accounts. Some women maintain very large emergency balances in non-interest-bearing or low-yield accounts, which can dampen retirement savings growth. Patti Black, a certified financial planner, notes that keeping about a year’s expenses in a liquid account can be reasonable — but recommends putting excess cash where it can earn a return.
What this means for savers and employers: individual habits matter, but so do pay equity, benefits that protect working parents and caregivers, and plan design that encourages steady saving and captures employer matching contributions. As retirement costs rise, those combined factors will determine whether today’s saving patterns translate into secure retirements for both sexes.
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Jordan Keller specializes in analyzing the US financial markets. With concrete recommendations, he helps you secure and boost your investments by providing strategies that adapt to market fluctuations.