401(k) Plans: Women Save Less

Only about half of America’s working adults take advantage of 401(k) plans offered by their employers, but women are less likely to participate than men.

Forty-nine percent of women, compared with 58 percent of men, say they contribute to their 401(k) plans. For women who earned below $50,000 annually, participation rates were at only 38 percent, according to a recent survey by Retirement Made Simpler, a coalition formed by AARP, the Financial Industry Regulatory Authority and the Retirement Security Project. About 10,108 working adults participated in the survey earlier this year.

When asked whether they felt they were saving enough for retirement, only 19 percent of women, and 26 percent of men, said yes. Women also expressed less confidence about making wise investment selections in their retirement plans–23 percent compared with 33 percent of men.

For many reasons, women frequently feel they don’t have “extra” money to save. They’re generally paid less than men. They’re far more likely to leave employment for long stretches, to raise kids or to care for aging parents. They may have taken time off for pregnancy, or they're divorced with childcare responsibilities.

“We’ve known for a long time that women are far less likely than men to save adequately for retirement for a host of reasons,” says Tom Nelson, COO at AARP. He urges employers to offer automatic enrollment into company 401(k) plans to encourage all workers—men and women—to save for retirement.

Carole Fleck is a senior editor at the AARP Bulletin.