There have been plenty of studies that highlight the fact that women are running behind when it comes to retirement savings—they have less put away than men despite the fact that, statistically, they’ll need more.
A new study from Vanguard has looked at the data and concluded that the culprit for those low balances is women’s pay, not their savings habits or participation rates.
According to the study, women are 14 percent more likely than men to participate in their employer’s retirement plan, and once they’re enrolled save at higher rates than men at all income levels.
But those income levels are key to women having a successful outcome in saving for retirement—and it’s not happening.
What Your Peers Are Reading
Although women not only participate at higher rates than men and even take similar risks with the investments in their plans, they simply don’t have as much pay to draw on for savings.
The automatic enrollment feature has muddied the waters on this finding.
While at first blush, men appear to benefit more from automatic enrollment than women, the Vanguard study found that lower-wage individuals see the largest improvements from automatic enrollment—and a higher proportion of women than men have lower wages.