Advertising Disclosure

We may earn money from our partners when you click a link, complete a form or call a phone number.

We believe everyone deserves to make thoughtful, informed purchase decisions. As a result, we provide our buyers guides and local guides free for consumers. We may receive compensation from our partners. However, Retirement Living independently researches companies, and the compensation we receive does not affect the analysis of our staff. Retirement Living will not include companies on our guides that do not meet our quality standards. The compensation we receive from our partners may impact how and where companies appear on our site, including the order in which they appear. As an Amazon Associate Retirement Living earns from qualifying purchases.

Retirement Living independently researches companies, and we use editorial discretion to award companies with special recognition (i.e. Great Value) based on our staff's judgment. We do this to help you identify companies that will meet your specific buying needs, and we do not receive compensation for these designations.

Get Insider Access

Get special offers, advice and tips from Retirement Living delivered to your inbox.

Retirement Guide for People in Their 40s

Updated: July 19, 2023
By: Dr. Steven Rydin
Dr. Steven Rydin
Director of Product
As the former director of product, Steven oversaw Retirement Living’s product and marketing efforts for four years. His digital marketing expertise helped launch senior-focused buyer’s guides and a wide range of products surrounding finance, insurance, healthcare, and lifestyle. Steven holds a Doctor of Business Administration degree from George Fox University.
Director of Product
Edited by: Jeff Smith
Jeff Smith
Sr. Content Manager
As Retirement Living’s senior content manager, Jeff oversees the product and publishing of all retirement, investing, and consumer wellness content on the site. His extensive expertise in brand messaging and creating data-driven stories helps position Retirement Living as a top authority for senior content and community resources.
Sr. Content Manager

Retirement planning is crucial for people in their 40s, yet many 40-somethings fail to plan for retirement. The State of American Retirement research study compiled by the Economic Policy Institute shows that the median retirement savings amount for investors between the ages of 38 and 50 averages out to around $5,200. Even though there are still at least 20 years remaining to save for retirement when you are in your 40s, that number is shockingly low.

Great Advisor Network

4.7 Stars


  • Finding an advisor near you
  • No-fee options

Visit Site

How Much Should I Have Saved?

There is no one-size-fits-all approach to retirement planning for people in their 40s. Fortunately, there are some quick guidelines to quickly estimate how much you’ll need to retire, including the 25x expenses rule or the 70% of rule. For a comprehensive answer, check out our answer to the question How Much Money Do I Need to Retire?.

If you’re in your 40s and have yet to reach your retirement savings factor, there is no need to worry excessively. There is still plenty of time to plan for your retirement, but you have to take action now.

Retirement Savings Steps to Take in Your 40s

There are many quick, easy ways for 40-somethings to plan for retirement. These include:

  1. Set Up a 401(k)

    A 401(k) is a qualified employer-established retirement savings plan that allows working individuals to defer a portion of their salary for retirement. 401(k) plans allow workers to defer taxes on a pre- or post-tax basis. Some employers will match an employee’s 401(k) plan contributions up to a certain percentage as well.

    If your employer offers a 401(k) option, now is a great time to take advantage of it. If your employer does matching funds, that’s free money for retirement, and it’s foolish not to take advantage of this program. Moreover, people in their 40s may want to fund their 401(k) up to $18,500, the maximum 401(k) contribution limit for individuals under the age of 50.

  2. Monitor Your Expenses

    When you’re in your 40s, it’s often a time of life filled with vibrant friendships, young families and career aspirations. The urge to buy a new car, more house than you need, or take a tropical vacation can be challenging to overcome. If you keep your spending in check, however, you will have more money to save for retirement.

    Use the money you save by making less elaborate purchases to fund a self-directed IRA if you max out a pre-tax employer-based 401(k) or 403(b). Set up automatic contributions to be taken from your checking account and deposited into the IRA each payday. Even if you can only spare $20 per paycheck, dollar-cost averaging and setting up automatic reinvestments will grow your retirement savings.

  3. Eliminate Debt

    Debt is a problem most 40-somethings want to avoid. If you allocate time and resources to analyze your outstanding debt, you can take the necessary steps to reduce or eliminate this issue.

    High-interest consumer debt can sometimes sabotage a person’s retirement savings. Thus, you should prioritize high-interest consumer debt and pay it down as much as possible. You can then move on to your mortgage and any other outstanding debt.

    By paying off outstanding debt now, you won’t have to worry about this debt when you retire. Best of all, as you eliminate outstanding debt from your ledger, you can use the money you’d otherwise spend to pay off various bills and add it to your retirement savings.

  4. Maintain Your Flexibility

    Even the best-laid retirement plans for people in their 40s might fail to materialize. Therefore, it is essential to maintain as much flexibility as possible as you plan for retirement. If your initial retirement plan fails to deliver the desired results, you’ll be able to change course quickly and minimize your losses.

    You should try to avoid putting all of your retirement eggs in a single basket, too. Instead, diversify your retirement portfolio to accumulate retirement savings from a variety of investments.

The Bottom Line on Retirement Planning in Your 40s

It may seem like retirement is in the distant future, even for people in their 40s. Recent data indicates most working Americans expect to retire at age 66, according to U.S. News & World Report.

Ultimately, it is never too early to start planning for retirement and developing an effective retirement plan is critical. Although retirement planning for people in their 40s may seem like a daunting task at first, many tools and resources are available to help get ready for retirement.

Start planning for retirement today to avoid the hassle of playing financial catch-up later in life. Prepare for retirement while you are still in your 40s, and you will have the necessary finances available to maintain a comfortable lifestyle in your later years.