Vanguard Finds Large Retirement Savings Gap for Women

Vanguard released a study this month that found a sizable shortfall in retirement savings for women in the United States. The report compares account balances, contribution patterns and projected retirement income by gender and age.

The firm analyzed defined contribution account records alongside survey data to estimate how current savings and contribution behavior translate into future retirement income. Vanguard compared balances and projected income for men and women across different age and income groups.

Researchers identified several contributors to the gap: lower lifetime earnings for women, interruptions in work for caregiving, fewer years of participation in employer retirement plans and lower average contribution rates. The analysis also notes that longer average lifespans for women increase the amount of savings needed to fund retirement years.

The shortfall is largest among lower-income workers, single women and women of color, Vanguard found. Those groups face compounded disadvantages from lower pay and more limited access to employer-sponsored plans, the report says.

Behavioral and structural factors are both cited. Career interruptions for child-rearing or elder care reduce years of payroll contributions and employer matching. The report finds women tend to choose more conservative asset allocations, which can slow long-term account growth. Persistent wage gaps reduce the base for saving, and lower plan participation and eligibility-especially for part-time and gig workers-limit accumulation.

Vanguard sets out several responses for different actors. For individuals, the firm recommends increasing contribution rates when possible, claiming employer matching contributions, making catch-up contributions for workers over 50 and reviewing asset allocation with longevity in mind. For employers, the report suggests expanding plan access through auto-enrollment, higher default contribution rates and more inclusive eligibility for part-time workers. On policy, Vanguard highlights options such as caregiver credits that would help workers who leave the labor force preserve retirement benefit accruals.

The study examines Social Security and other income sources. While Social Security provides a baseline for many retirees, Vanguard's projections indicate that differences in private account balances often leave women with lower total projected retirement income. The report also cites higher health care costs and greater likelihood of needing long-term care as additional financial pressures for women.

Vanguard models scenarios showing how modest increases in contribution rates, longer work lives or improved plan access could narrow the shortfall for many women. The report concludes by calling for coordinated action by savers, plan sponsors and policymakers and for targeted measures addressing wage inequality, caregiving-related work interruptions, limited plan access and lower contribution behavior.