In 401(k) retirement plans without automatic enrollment, women are more likely to sign up, according to a report from Vanguard.
In plans with automatic enrollment, 93% of both men and women remain signed up. But in plans where enrollment is voluntary, men don’t seem to get the message of the importance of workplace retirement savings as well as women do.
At all income levels, men’s participation levels lag those of women, especially in the $50,000-$74,999 income range—where 81% of women sign up to invest in their 401(k), but only 67% of men do.
Across all income groups, 68% of women sign up for a 401(k) plan that requires actively “checking the box” to join in, compared to 65% of men.
“The savings behavior of women is on par with or, in some cases, better than men,” Dave Stinnett, head of strategic retirement consulting at Vanguard, tells CNBC.
However, men have higher balances, in part because they defer larger amounts than women (7.5% versus 7%), but more so because they earn much more than women.
For every dollar a man in a full-time position earns, women earn just 83.4 cents, according to the U.S. Bureau of Labor Statistics.
There is a bill in Congress dubbed Secure 2.0 that would require newly formed 401(k) plans to automatically enroll participants, as well as plans with 10 or fewer employees (also known as “micro plans”) and plans at companies that are less than three years old. 401(k) plans are not as common at small companies as they are mid- and large-sized companies.
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