February 2023

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A gender lens in 401(k) plans

While women have made strides to improve their financial wellness, there is still more to be done to help close the financial gap between women and men. The recently updated Bank of America analysis, 2022: Gender Lens in Defined Contribution Plans, published by the Chief Investment Office, reveals that women continue to trail men in their retirement readiness.

While 401(k) participation rates of women remain lower than those of men, the study found women and men are contributing at similar rates. However, women’s 401(k) balances are lower than men’s, likely due to their more conservative investment approach, pay gap, and reduced time to build assets, since more women experience career interruptions for caregiving and other reasons.

The data in this report helps us better understand issues affecting women’s financial health and allows us to use those insights to enhance engagement and educational programs to help narrow the wealth gap.” —  Kevin Crain, head of Retirement Research & Insights at Bank of America

“The differences between men’s and women’s financial health highlight the impact of pay inequity, career gaps, and women being more conservative investors,” says Kevin Crain, head of Retirement Research & Insights at Bank of America. “The data in this report helps us better understand issues affecting women’s financial health and allows us to use those insights to enhance engagement and educational programs to help narrow the wealth gap.”

Over the past few years, Bank of America has added more educational content designed specifically for women to provide them with more relevant and engaging experiences and encourage greater participation in opportunities to help improve their financial health. And engagement levels have grown, with women comprising 59% of financial education event attendees, and 55% participating in a personal financial consultation.¹

“We will continue to use research and analysis to help inform strategies that can help move the needle on financial well-being of women—and all employees,” says Crain. “Working with plan sponsors, we are analyzing the needs of their diverse workforce and using our findings to expand targeted educational opportunities and enhance plan design strategies—such as automated savings programs and ensuring diversified investment options. Together, we can help drive better financial outcomes for all,” says Crain.