3 Reasons Women Are Better at Retirement Planning Than Men

A new Vanguard study of participants in the retirement savings plans it oversees shows that men’s 401(k) account balances are significantly larger than women’s on average—roughly $123,000 vs. $80,000. But don’t equate size with retirement planning effectiveness. Despite their lower balances, here’s why women are still better retirement planners than men—and why you should emulate them if you want a secure retirement.

1. Women are more likely to participate in a 401(k) than men.

The single most important thing you can do to improve your chances of being able to retire in comfort is save on a regular basis, preferably by taking advantage of a tax-advantaged plan like a 401(k), if one is available to you. And Vanguard data based on 720,000 eligible employees shows women are more likely to take this crucial step. Overall, 73% of women vs. 66% of men enrolled in their employer plan. This was true for each of the income groups Vanguard examined, ranging from less than $30,000 to more than $100,000 a year.

Interestingly, participation rates between the sexes even out at 89% in 401(k)s with automatic enrollment, which require employees to opt out if they don’t want to be part of the plan. Which suggests that while men may not be as eager as women to do the right thing on their own, they’ll make the right choice with a little prodding.

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