Savings by Gender: Who’s Saving More, Women or Men?

The gender pay gap has come under increased scrutiny in recent years — and for good reason. In 2018, U.S. government data show that median weekly earnings for men reached $973, while women earned $789. By this measure, women make 80% of what men make, or 80 cents for every dollar a man makes. The numbers skew even more when race is taken into account. Compared to the median earnings of white men, black women make 65% and Hispanic women make 62% — although Asian women make 94% of what white men take home. Meanwhile, black women earn 89% of what black men make, Hispanic women earn 86% of what Hispanic make, and Asian women make 76% of what Asian men take home.

MagnifyMoney has taken a deep dive into Federal Reserve data to look at the differences in savings between men and women. No matter how you slice it, men are earning more than women, but the data also show that women are better savers than men by some measures.

Key findings

• Women earn less than men, so it’s not surprising that they would have fewer total dollars saved. Women had an average of $7,738 in savings accounts in 2016. This is 30% less than the average $11,110 that men had in savings. This includes savings and CD accounts.
• Similarly, women also have less savings in their retirement accounts. In 2016, women had an average of $47,119 in 401(k), IRA and other types of retirement accounts. Men had an average of $62,079.
• Even though women make less than men, women consistently keep more of their assets in savings vehicles like savings accounts than men do. Currently, women have an average of about 23.5% of financial assets in savings accounts and CDs. By comparison, men keep only about 15% of these assets in savings accounts and CDs.
• Instead, men choose to take on more risk by investing in the market. On average, men keep a whopping 85% of their money in stocks, bonds or mutual funds, while women play it a bit safer by placing 76.5% of their assets in stocks, bonds and mutual funds. When looking solely at stocks, women have less exposure to stocks than men do. Excluding retirement accounts, women currently have an average of 23.1% of their financial assets in stocks, versus the 32.3% percent that men have.
• The average certificate of deposit (CD) balance for women is similarly lower. Women had an average of $2,925 in CDs in 2016, notably less than men’s CD savings of $6,187. This indicates that women may choose to keep their assets more “liquid” by placing them in deposit accounts, rather than market investments.
• But on average, women have consistently socked away a higher percentage of their money. Currently, women have about 45% of their liquid assets in savings accounts, while men have about 43%. This is a relatively new development, as men have historically chosen to save much less in liquid assets than women in previous years.
• Historically, women have also been more diligent about keeping more of their financial assets in CDs than men. Since 1998, women parked an average of 5.9% of their financial assets in CDs, versus men’s 3.64% average. However, women have decreased their CD savings over the past decade, perhaps in response to average CD rates reaching rock-bottom yields after the financial crisis. In fact, 2016 is the first time we see more savings in men’s CD accounts at 2.8%, than women have at 1.9%.
• Finally, women are slightly more likely to own a savings or CD account. In 2016, 48% of women had at least one of these savings products, versus 46% of men.

Bottom line

The data begs the question: Even though women earn less, why do they save a greater proportion of what they have than men do?

A 2017 Fidelity consumer analysis found that women tend to build financial plans and save with the future in mind, both for themselves and their families. Female Fidelity investors don’t often make quick portfolio changes in response to market changes. This correlates with the larger percent of women’s savings going to CDs, which can lock in high rates for years, compared to men, who choose to take more risks with their savings. Fidelity also found that women were more likely to keep their money in an “age-based allocation of investments” than men.

In a 2016 study, Vanguard also found that women are more likely than men to join their employer’s retirement savings plan. For example, 86% of women who made between $50,000 and $74,999 participated in their employer’s plan, while 77% of men in the same income group chose to participate.

All in all, it seems women are more conservative with the money they make. They choose to place their funds in stable savings vehicles and avoid taking on much risk, in order to save efficiently for the long term.

Methodology

Using the Survey of Consumer Finances from the Federal Reserve, MagnifyMoney examined the differences of certain household assets between men and women from 1998 through 2016. For this analysis, coupled households and single households with children were excluded.