How 401(k) Auto Portability Boosts Women's Retirement Savings
Women already face an uphill battle when saving for retirement. With auto portability tech, their 401(k)s can be transferred when they change jobs, which can add up over the years.


Much attention has been paid to income inequality for American women. However, income inequality drives another, less-discussed threat to women’s financial security — the lower amount of retirement benefits women earn compared to men.
According to the Economic Policy Institute, women were paid an average of 21.8% less than men in 2023. To make matters worse, a 2024 study conducted by the TIAA Institute and Ipsos found that, on average, women retire two years earlier, live three years longer and retire with 30% less income than men.
In addition, the study found:

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- 23% of women who are planning to retire have at least $250,000 saved in a tax-advantaged retirement account, as opposed to 29% of men
- Only 16% of women have contributed to their retirement savings over the previous year, vs 21% of men
- Fewer women (64%) than men (70%) have retirement accounts
- 15% of women don’t plan to retire because retirement is either financially unrealistic or not part of their plans, compared to 11% of men
For women in our country’s workforce, retiring earlier, living longer and retiring with less savings than their male counterparts paints a dire financial picture. In order to avoid outliving our retirement savings or being unable to meet important expenses in retirement, women need to make every dollar they save count and maximize what they do manage to save.
Women can increase the income enjoyed in retirement by avoiding the decision to prematurely cash out 401(k) savings accounts — and further by consolidating 401(k) accounts when changing jobs. But unfortunately, many women end up cashing out their 401(k) savings when they change jobs.
Research published by Bank of America in April 2024 indicates that women account for about 47% of all participants in defined contribution plans. And based on data from the Employee Benefit Research Institute (EBRI)/Investment Company Institute (ICI) 401(k) database, as well as data from the largest 401(k) plan recordkeepers and the EBRI Retirement Security Projection Model®, that 47% includes 7.7 million women who participate in employer-sponsored plans that change jobs every year.
Out of that sum, about 3.1 million of them (41%) will cash out their 401(k) accounts after switching jobs and pay taxes and penalties as a result.
Crucially, 38% of those 7.7 million women, or 2.9 million of them, who cash out every year have 401(k) balances of less than $7,000, suggesting lower salaries and tenure. Out of that 2.9 million, the majority — 2.1 million, or 72% — cash out $5.3 billion in savings from the U.S. retirement system every year.
Based on this data, over the course of a generation, 116 million women will cash out nearly $290 billion in retirement savings, in today’s dollars, if this trend continues.
The technology solution that can help women preserve more retirement savings
Female and male job-changers with larger 401(k) account balances are more likely to avoid cashing out than those with smaller balances, according to the data — and now, to help those with smaller balances preserve their savings, a technology solution has been developed to automate the plan-to-plan transfer of 401(k) savings balances of up to $7,000.
This solution, auto portability, automatically transports a plan participant’s 401(k) savings account of $7,000 or below from their former employer’s plan to an active account in their current employer’s plan.
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Based on the Auto Portability Simulation that we developed at Retirement Clearinghouse, if auto portability were to be adopted by retirement plan sponsors and recordkeepers nationwide, the savings of 2 million women would be preserved in the U.S. retirement system every year.
If that nationwide adoption were to occur over the course of a generation, 111 million women would preserve $753 billion (measured in today’s dollars) in our nation’s retirement system.
On an individual basis, if a woman preserves just three 401(k) account balances of $7,000 during her entire working life, she can increase her savings in retirement by an additional $157,878, according to Retirement Clearinghouse data calculations. Preserving just one $7,000 401(k) balance at age 25 can add $86,912 in extra retirement savings.
While auto portability can’t close the income inequality gap for our country’s hardworking women, it can go a long way toward leveling the retirement savings playing field for a large segment of women in the U.S. workforce.
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Spencer Williams is Retirement Clearinghouse’s Founder, President and CEO and also is the President and CEO of Portability Services Network, LLC. Retirement Clearinghouse is a specialized provider of retirement savings portability and account consolidation services for America’s mobile workforce. Portability Services Network, LLC is a retirement industry-led utility dedicated to the industry-wide adoption of auto portability. Williams is an innovator, including RCH’s singular innovation, Auto Portability, specially designed to help low-income and minority workers. Portability Services Network is built on a foundation of Retirement Clearinghouse’s intellectual property, technology and operations.
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