How to retire at 40

1 min readLast updated January 24, 2024by Unbiased team

Covering how much money is needed, what the average savings are, and tips on how to plan and save, we take a look at how to retire at 40.


  • Retiring at 40 is difficult, but it’s certainly not impossible if you have the right strategy. 

  • If you want to retire at 40, multiplying your desired annual income by 45 can give you an indication of how much you need to save. 

  • To be successful, you’ll need to estimate savings growth and find ways to increase your income and trim expenses. 

  • A financial advisor can help you create a solid retirement plan so you can live out your dream retirement.  

According to Gallup research, the average retirement age in the US is 61. However, between 2016 and 2022, 1% of America’s retired population was between the ages of 40 and 44.  

While not common, retiring at 40 is possible – even if it requires a huge amount of hard work, accepting delayed gratification, saving strategically, and finding ways to cut down on your expenses. Find out about how to retire at 40. 

Can I retire at 40? 

While many Americans aim to retire at what Social Security considers the normal retirement age of 66 or 67, some have bigger ideas and ask, “Can I retire at 40?”  

Early retirement at this age isn’t impossible, but it’s not likely to happen without hard work and extraordinary dedication.  

Retiring early means losing out on more than 20 years of working and saving. You’ll need to ensure that you can save enough money to cover all your expenses and maintain the lifestyle you desire. Speak to a regulated financial advisor if you’re thinking about committing to retire long before your mid-to-late 60s. A trusted advisor can help you draw up an early retirement plan, and they can recommend savings vehicles. 

How much money do I need to retire at 40? 

The single most important question if you’re looking at saying goodbye to the working world earlier than what’s considered normal for most people is, “How much money do I need to retire at 40?” Unfortunately, there’s no simple answer. 

According to some financial advisors, a good general rule to follow when considering how to retire at 40 is to multiply your desired annual income in retirement by 45 to get a basic idea of how much money to save.  

For example, if you want an annual retirement income of $50,000 a year/$4,166.67 a month for a projected 45 years, you need to save $2.25 million.  

Remember that the amount of money you would need to save for retiring at 40 varies from state to state due to differences in the cost of living, earning potential, and other factors.  

It’s a good idea to take your expenses into account. While you can’t know exactly how much you’ll spend day-to-day, having a guesstimate is a good starting point. This will help with your “how much money do I need to retire at 40” calculations.  

Take a look at the average annual expenses of people aged 65 and older in 2021, according to the U.S. Bureau of Labor Statistics (BLS): 

ExpenseAverage Amount Spent In 2021
Housing $18,872
Utilities, fuel, public services $3,921
Health care $7,030
Transportation $7,160
Food at home $4,497
Dining out $1,994
Personal insurance and pensions $2,850
Entertainment $2,889
Clothing and services $986
Reading materials $138

A more recent BLS Consumer Expenditure Survey put the average monthly expenses for American households at $6,081, or $72,972. 

With average household expenses coming in between $4,000 and $6,000 per month, you may need more retirement savings than you initially anticipated.  

What are the average retirement savings at 40? 

According to the Federal Reserve, the average retirement savings at 40 is $101,899.22. However, the Employee Benefit Research Institute’s 2019 Retirement Confidence Survey revealed that one in three Americans believe that they will need minimum savings of $1 million for a comfortable retirement. 

The average American cannot afford to retire at 40. That said, even though saving can be difficult, taking early retirement at this age is not impossible. 

Saving for retirement at 40: How do I do it? 

If you’re willing to rise to the challenge of saving for retirement at 40, the next question is, “How do you do it?”  

Discover four of the best ways to save for retirement at 40 below: 

  1. Determine a savings goal: Determine a savings goal by multiplying your desired annual income by 45, as mentioned. You can work on a lower amount if you factor in Social Security payments income from part-time work or a side hustle in retirement. Consider your budget and see if you can maintain a comfortable lifestyle for less money, such as by retiring overseas. 

  2. Estimate your savings growth: Consider how much you have saved already and how much time you have until you turn 40. This will give you an idea of how much to save monthly and yearly to be able to retire at 40. Take potential income from Social Security and/or a side hustle into account.  

  3. Find more ways to save money: Find ways to increase your income and invest the extra money you make. Consider looking for a part-time job or requesting additional hours at work to boost your cash flow. Look for ways to reduce your expenses, such as canceling cable TV, selling your car, or switching to public transport. 

  4. Choose the best savings products: Saving for retirement at 40 means saving strategically for a shorter period of time. Speak to a financial advisor about the best savings products and strategies. Ask about regular, taxable, non-retirement accounts, as there are significant tax implications for 401(k)s and IRAs if you take early retirement. 

Get expert retirement advice  

Early retirement at any age can be difficult but not impossible. If you’re looking at how to retire at 40 because that’s what you plan to do, you may have a big task ahead of you.  

However, with the help of a trustworthy financial advisor and with careful planning, budgeting, strategic saving, and finding ways to increase your income and trim your expenses, retiring at 40 can be done.  

Learn more about retirement with Unbiased, and let us match you with a regulated advisor for expert financial advice. 


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.