Women are doing many of the right things when it comes to saving for retirement. They are more likely to join workplace retirement plans, save a larger share of their income, and tend to invest more consistently than men. However, when it comes to the final numbers, women still end up with smaller retirement account balances. New data from Vanguard’s 2026 How America Saves report focuses on this gap. However, women generally show stronger saving habits, their average 401(k) balances continue to trail those of men.
Women are building better saving habits
Women are more disciplined retirement savers than men, according to Vanguard’s latest analysis of nearly 5 million retirement savers across more than 1,300 workplace plans. “At comparable income levels, women are more likely to participate in plans and often save at slightly higher rates,” said Jeff Clark, head of defined contribution research for Vanguard and author of the report to CNBC.
“They also tend to invest more consistently, using professionally managed options and trading less frequently — behaviours linked to stronger long-term outcomes,” Clark said. Research from other financial firms has found similar patterns. A study by Fidelity Investments found that women’s investment portfolios outperformed men’s by an average of 0.4 percentage points between 2011 and 2020. More recent research from Wells Fargo in 2025 showed that women achieve similar or better returns while taking less investment risk than men.
The balance gap remains
Regardless of these positive habits, women still hold less money in their retirement accounts overall. According to Vanguard, the average 401(k) balance for women in 2025 stood at $146,476. For men, the average balance was significantly higher at $194,597.
The gap, however, becomes much smaller when income levels are compared. Among retirement savers earning between $30,000 and $149,999, women’s average account balances were within 10% of men’s balances.
In some cases, women were even ahead. Among savers earning between $30,000 and $49,999, women had an average balance of $31,806, compared with $31,288 for men.
“Women have lower balances on average due to income differences, that gap narrows significantly when comparing participants at similar income levels,” Clark told CNBC.
Lower earnings and caregiving take a toll
Experts say the retirement gap is driven less by saving behaviour and more by income and career interruptions. Women working full-time earn about 81% of what men earn, according to data from the US Labour Department. Lower earnings naturally mean lower retirement contributions over time.
Many women also step away from work, reduce their hours, or take part-time roles to care for children, ageing parents or sick family members. “Working part-time or stopping work entirely for a time to be a caregiver, for children, aging parents, or a sick spouse,” can affect retirement savings, said certified financial planner Patti Black, a financial advisor at Savant Wealth Management in Birmingham, Alabama to CNBC.
A 2025 report by AARP and the National Alliance for Caregiving found that most caregivers are women. Time spent outside the workforce can mean missing employer retirement contributions and valuable years of compound growth. Women may also face what researchers call the “motherhood penalty,” where earnings decline after having children, creating another obstacle to long-term wealth building.
Women favour steady investing
The report also found that men and women invest their retirement savings in broadly similar ways. Both groups keep an average of 6% of their retirement assets in bonds and around 3% in cash.
Women, however, show a stronger preference for target-date funds, which automatically adjust investments as retirement approaches. These funds account for 50% of women’s retirement assets on average, compared with 42% for men.
Men, meanwhile, hold a larger share in diversified equity funds, with 42% of assets invested in these funds compared with 37% among women.
Too much cash can be another challenge
While women are often careful savers, some may be holding too much money in cash outside their retirement accounts, according to Black.
Instead of investing excess savings, some women keep large emergency reserves in regular bank accounts, which can limit long-term growth.
“They have a rainy day fund that’s a ‘Noah’s Ark flood’ kind of emergency fund,” Black said. “We don’t need quite that much in an emergency fund.”
She added that keeping up to a year’s worth of expenses in cash may be reasonable, but savers should ensure the money is earning interest.