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There Isn’t a Retirement Plan Coverage Gap Between Men and Women, But …

Practice Management

A surprising finding in a comprehensive report from earlier this year: there is no gender gap between men and women in access to employer-based retirement plans, and participation rates are also consistent between the genders.

Unfortunately, the same cannot be said for savings, with women accumulating significantly less than their male counterparts, according to T. Rowe Price.
More specifically, the firm’s annual Retirement Savings and Spending study found women lag far behind men in contributions, savings, and confidence.

“Notably, the median 401(k) account balance for women was 65% lower compared to men,” T. Rowe said.


It listed contributing factors to the gender savings gap, which include:

  • National income averages reflect that women typically earn less than men.
  • Women are more likely to have shorter job tenure than men (median of six versus eight years).
  • More women than men held debt across most of the categories offered in the survey, including credit card and personal loan debt, with a staggering disparity in student loan debt in particular. According to the study, 23% of women and 14% of men reported student loan debt—a difference of 60%.

“The gender income gap is contributing to a domino effect of women’s finances; lower earnings can affect their current financial decisions, which ultimately impacts their financial future, including retirement savings,” Judith Ward, CFP, T. Rowe Price’s thought leadership director, said in a statement. “As women, it’s critical for us to be proactive when it comes to our money and to seek guidance and education necessary to put us on the path toward a successful financial future.”

Additionally, the survey found:

  • The median annual contribution for women was 43% less than men.
  • Women are less confident about retirement than men (22% versus 37%).

“The gender gap in retirement savings is a challenge for women who are preparing for retirement, and we understand that there are various social and economic factors that significantly affect women’s ability to save,” Sudipto Banerjee, Vice President of Retirement Thought Leadership, added. “We believe that financial wellness programs offered by employers can be beneficial. Taking steps to improve individual finances can be empowering and help position women for a more secure retirement.”

The savings gap between genders, as well as the savings and coverage gap for minority workers, is an ongoing concern for the retirement plan industry and policymakers. Aliya Robinson, the firm’s Managing Legal Counsel for Legislative and Regulatory Affairs, said the information is being shared in the retirement community and on Capitol Hill.