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Women trail men in retirement savings, study finds

Survey finds women add to IRA accounts as often, but make smaller contributions.
BY JONNELLE MARTE, The Washington Post Published: May 28, 2014
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— Women are just as likely to put away money for retirement as men — but they are way behind their male counterparts in total savings, a new study shows.

Men had an average of $139,467 in individual retirement accounts as of 2012, compared with an average of $81,700 for women, according to a report released Wednesday by the Employee Benefit Research Institute (EBRI), a Washington-based organization that focuses on health, savings and retirement issues.

Women moved money into their IRAs just as often as men did, the study found. This was true for IRAs overall, in which 10.9 percent of accounts are held by women and 10.8 percent by men; for Roth IRAs, which require contributions of after-tax dollars; and for traditional IRAs, which can include tax-deductible contributions.

Why the difference?

Although women are just as likely to add to IRA accounts as men, they make smaller contributions on average. In 2012, female IRA account holders contributed an average of $3,995, compared with an average of $4,023 by men, according to the EBRI study. The difference is slight, but the pattern held true for most age groups, according to the study.

A couple of factors could explain those smaller contribution amounts, said Craig Copeland, an EBRI senior research associate. Some married women may make joint IRA contributions with their spouses, and those accounts may be under their husband's name, he said.

But the most likely reason, he said, is not surprising: Women make less on average than men. Women earned about 77 cents for every dollar earned by men in 2012, according to the latest data from the Census Bureau. That was unchanged from the year before and not much higher than the 61 cents women made for every dollar earned by men in 1960.

Styles vary

The wage gap, however, is smaller than the nearly 40 percent divide in retirement savings balances between men and women, hinting that there is something else at play. Some women may be limited in how much they can put away for retirement because of other financial responsibilities, such as single mothers delaying retirement savings to cover child-care costs and some women deciding they would rather set aside money for a home.

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