Women are better savers and more likely to use professional advice regarding allocation strategies. While men have higher average account balances, this is due more to higher wages and longer tenures than investing behaviors. Among both genders, retirement savings plan participation rates rise when employers set the default option as automatically enrolling employees.

A senior research analyst with the Vanguard Center for Retirement Research reached these conclusions after analyzing Vanguard’s recordkeeping systems for employer-sponsor retirement plans [e.g., 401(k) plans]. She sought to see if a gender gap exists in investing behaviors.

What she found was a higher participation rate among women. When enrollment in an employer-sponsor retirement plan is optional, women are more likely than men to participate (66% versus 58%). The difference is more pronounced among lower- and middle-income bands: Women are between 15% and 31% more likely to participate when incomes are below $100,000 per year. At income levels above $100,000 per year, the gender gap narrows to four percentage points (91% versus 87%).

Automatic enrollment (retirement savings plan that require an employee to opt out of participating) play a big role in boosting participation. Since more women are in lower-paying jobs (45% of the female population have wages of $50,000 or less, versus 28% of men), they benefit more from auto-enrollment. Once enrolled, women tend to save more than men in every income band. In aggregate, women save 7%, while men save 6.8%. Wages do play a role, however, with savings rates increasing at higher income levels.

Notably, Vanguard’s data does not show women being any less risk-averse then men despite viewpoints implying the opposite. Women allocate 73% of their portfolios to stocks, whereas men have an average 74% stock allocation. Where they differ is the use of professionally managed allocation plans. Women are more likely than men to hold a single target date fund (42% versus 36%).

Men did, however, realize higher returns during the five-year period ending in 2014 (10.1% for men versus 9.7% for women). The report’s author attributes this to men holding more actively managed equity funds “at the margin.” Men also had larger average account balances: $123,262 versus $79,572 due to higher wages. When income differences are accounted for, account balances are similar.

Source: “Women Versus Men in DC Plans,” Jean Young, Vanguard Research, October 2015.