Women are Winning the Race to Retirement Savings

March 15, 2019 | By Steven DiGregorio


A Strong Sense of Saving


Women have become a stronger force than ever in the fight for equal pay in the workplace.  With high hopes that one day men and women will be paid equally, women seem to be winning in one area already – saving.

A Vanguard study of participants in the retirement savings plans it oversees, shows that men’s 401(k) balances are significantly higher than women’s on average – roughly $123,000 vs. $80,000.  However, despite the lower average balances, women tend to prove themselves as the stronger saver compared to men.

Based on the study, women are more likely to participate in a 401(k) plan than men.  Vanguard data based on 720,000 eligible employees shows that 73% of women vs. 66% of men enrolled in their employer 401(k) plan.  Women also tend to save a higher percentage of their salary as well compared to men when participating in a 401(k).  The study shows that when it comes to higher income, women tend to save even more compared to their male counterparts.  Over time, the savings can translate to a substantially bigger nest egg during retirement and post-life career.

The study continues noting that when it comes to investing, women tend to invest more prudently than men.  Conventional wisdom holds women as being more risk-averse and less likely to aggressively  invest than men.  However, Vanguard data based on approximately 3.6 million accounts shows that when it comes to stock allocations, women hold 73% of savings in stock compared to 74% for men.  Women, however tend to prefer a diversified mix of stocks and bonds, such as target-date or balanced fund rather than try to assemble a portfolio on their own.  This gives an advantage to women because research shows that 401(k) participants who get investing help, benefit in better investing results than those who invest on their own.  Men have a knack for not wanting to ask for help which puts women at an advantage.  When women seek financial advice on how to maximize their return on investment, they have the potential to save and also earn much more than men.

Why the Gap?

So you may be asking yourself, “If women save more, why do men have higher balances in their 401(k)?”  Unfortunately, that is due to the wage gap between men and women.  According to the Vanguard study, men earn about 25% to 33% more on average than women, plus men tend to have more time on the job.  Those two factors lead to the significantly higher 401(k) balances for men.

Although it seems that the fight for equality in the workplace is far from over, you can take advantage of this information to make the most out of your 401(k) and save enough to give yourself a big nest egg for retirement.  Participate in a 401(k), try and save a higher percentage, and seek professional advice to invest smarter through stocks, bonds, or even real estate.  Study demonstrates that you don’t need a bigger salary to be smart with your money.  Look at women participants in the study as a role model for your retirement plans and save, save, save.


About Compass Asset Management Group

Our boutique-style firm has an investment philosophy is both prudent and value driven. We combine research from the largest firms on Wall Street with three decades of market experience to provide strategic, tactical and dynamic investment management.  Compass Asset Management Group, LLC delivers personalized financial planning, estate planning and investment management advice in a private setting with a high degree of sensitivity to your concerns and objectives. Our goal is to exceed yours expectations by listening closely, understanding deeply and communicating well through frequent, personal consultations entirely focused on your financial goals.

Make the right choice with your financial future. Consult Compass Asset Management Group for advice & guidance that will change your life. Plan better to live better…Call Compass Asset Management Group.


Please note that the content of this blog does not constitute tax advice and is only intended for the educational purpose of the reader.  Please consult your tax advisor for specifics regarding your circumstances.

For more information contact us at 845.563.0537 or Contact@CompassAMG.com

Steven M DiGregorio is President of Compass Asset Management Group, LLC and an Investment Advisor Representative with Spire Wealth Management, LLC a Federally Registered Investment Advisory Firm.  Securities offered through an affiliated company Spire Securities, LLC a Registered Broker/Dealer and member FINRA/SIPC.







Tags: 401(k), Divorce Planning, financial planning, investing, investment strategies, IRA, QDRO, retirement, retirement savings, rollover IRA, wage gap, women

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STEVEN M DIGREGORIO is President of Compass Asset Management Group, LLC and an Investment Advisor Representative with Spire Wealth Management, LLC.
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