How do you invest for retirement in your 40s?

1 min read by Unbiased team Last updated June 28, 2024

Learn about all the best investments in your 40s and why saving for retirement is so important at this phase of your life.


  • The average retirement savings for people in their 40s is approximately $195,000.  

  • The preferred retirement savings for anyone in their 40s is x3 their salary.  

  • Investing in your 40s is important for preparing for a comfortable and secure retirement.  

  • Working with a financial advisor can help you boost your retirement savings.  

Why is saving for retirement in your 40s important? 

Your 40s are a critical time for retirement planning, focusing on peak earning years and the narrowing window to retirement.  

Saving for retirement in your 40s will only become more difficult as you age, but the more prepared you are, the more secure your financial future will be.  

If you are in your 40s, it is imperative that you review your financial circumstances and potentially adjust your retirement strategies to ensure your financial goals are on track.  

Many people don't save enough in their 20s and 30s, and by properly saving in your 40s, you can catch up for lost time and increase your nest egg considerably. 

How should you evaluate your current retirement status? 

Knowing how to assess your current retirement savings is a crucial part of saving for retirement in your 40s.  

One of the best evaluation tools you can use is a retirement calculator. Retirement calculators take factors like age, occupation, inflation, and income into account to help you determine if you are behind, on track, or ahead of your retirement goals. 

You can also use benchmarks such as the X3 your salary rule to assess your current situation and map out your short- and long-term savings goals.  

With these tools, you will understand where you fit in the median retirement savings spectrum and how to catch up on retirement savings in your 40s.  

How do you maximize your retirement account contributions? 

Maximizing contributions to employer-sponsored plans like 401(k)s and 403(b)s can be a game-changer for saving in your 40s, especially if an employer match is available. 

If you are eligible, catching up on contributions has many benefits, such as increased tax limits for individuals over 40 and meeting savings goals in a shorter period.  

How can you diversify and rebalance your investment portfolios? 

Rebalancing your investment portfolio is important for ensuring it aligns with risk tolerance 

and your investment horizon.  

Diversification also plays a big role in investing for retirement in your 40s as it helps you to work across different asset classes to mitigate risk as retirement nears. 

You can diversify your investment portfolio by investing in stocks from different sectors, researching new investment opportunities, and working alongside an investment advisor.  

What are some other retirement savings options to consider? 

IRAs, health savings accounts (HSAs), and taxable investment accounts are all good strategies to start saving in your 40s or to increase your current contributions. 

Each of these options comes with unique tax advantages and growth potential.  

For example, IRAs are not taxed until you withdraw from the account (including earnings and gains), while HSAs reduce taxable income, and any investment growth that occurs in them is tax-free.  

How can you plan for healthcare costs? 

Potential and future healthcare costs are one of the most important reasons for saving money for retirement in your 40s.  

You have to consider the potential need for long-term care in addition to other surgeries, medications, or services you may need as you age.  

When approached strategically, HSAs can be used to help you save for health-related expenses in retirement. You can also invest in long-term care insurance, but the main goal here is to have enough saved in retirement that you don’t need to worry about random medical expenses.  

Should you prioritize debt repayment alongside retirement savings? 

When it comes to saving for retirement in your 40s, both debt repayment and retirement savings should be prioritized. 

There are ways to manage debt without sacrificing your retirement contributions. Focus on paying off high-interest debt, refusing to take out loans unless absolutely crucial, and expanding your investment strategy to ensure a constant increase of savings.  

The guidance of a financial advisor can also help you reach a sustainable retirement savings position.  

Should you review your insurance and estate plans? 

Yes. Reviewing your insurance coverage and estate plans is an essential part of retirement planning.  

It is also important to have an updated estate plan, including wills, trusts, and powers of attorney. 

Get expert financial advice 

If you haven’t already begun, saving for retirement in your 40s is not too late to start. By learning about the best way to invest in your 40s, re-evaluating your current savings plan, and working with a financial advisor, you can lay a solid foundation for your retirement.  

Get matched with an expert financial advisor at Unbiased to learn more about how to catch up on retirement savings in your 40s and build a financially sustainable future for yourself and your loved ones.  


Unbiased team

Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.