Women do almost everything right with their nest egg. They save more, trade less, and take on less risk.
So why do they retire with about $48,000 less in their 401(k)?
Better Habits But Smaller Balances
The numbers come from Vanguard's new How America Saves report. It tracks nearly 5 million savers across more than 1,300 work plans.
The average man's account held $194,597 last year. The average woman's held $146,476.
Yet women tend to be the steadier savers. At the same pay, they join plans more often and save a bit more.
They also lean on target-date funds. Those shift your mix for you as you near retirement.
That steady hand shows up in returns. One Fidelity study found women beat men by about 0.4% a year.
They did it while taking on less risk. Trading less and panicking less tends to pay off.
Women also use simple, hands-off funds more often. Those funds quietly beat constant tinkering.
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Why The Gap Comes Down To Paychecks
The gap is mostly about pay and time off. Women earn about 81 cents for every dollar men make.
They are also more likely to leave work to care for family. That choice is common, and it is costly.
Caregiving is unpaid work that still carries a price. It shows up decades later as a smaller balance.
Every year out of work is a year of missed savings. It is also a year of missed 401(k) matches.
Think of it like easing off the gas on a long drive. You still get there, just later and farther back.
The gap is not a rounding error. Over a long career, $48,000 can snowball into far more.
That is the cost of a few missed years. Small gaps early become big gaps later.
None of this is about skill. Women tend to make smart, steady moves.
The gap just starts from a smaller paycheck. Match the pay, and the gap nearly closes.
Among savers who earn $30,000 to $149,999, women's balances came within 10% of men's. In the lowest pay band, women actually pulled ahead.
Their average was $31,806, next to $31,288 for men. Same habits, better result.
Pay is the lever that moves the gap. The good habits are already there.
Worth Noting
There is one habit worth fixing. Some women hold too much cash on the side.
One planner suggests keeping about a year of costs in cash. The rest can sit where it earns interest and grows your balance.
Good habits build the savings, but bigger paychecks close the gap. Equal pay would shrink the balance gap on its own.
The answer here is no secret. It is steady habits early, plus pay that finally matches the work.
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