How to Catch Up on Retirement Savings in Your 40s

By Meela Imperato
How to Catch Up on Retirement Savings in Your 40s

In a perfect world, by the time we reach our fourth decade, we would have been socking away a portion of our earnings for a retirement savings plan since officially entering the workforce.

Life, however, doesn’t always go according to plan—if a plan was even in place. Divorce, illness, graduate school, a job loss, a flagging economy, personal and global emergencies (we see you, pandemic)—all can impact our savings and capacity to earn, leaving us feeling miles behind some of our peers in terms of retirement saving.

If this sounds familiar, rest assured you’re not alone. Data demonstrates that half of Americans between the ages of 18 and 34 haven’t begun saving for their golden years whatsoever, and 15% of people don’t start contributing to their nest egg until their 40s.1 Fortunately, there’s a bevy of ways to get—and stay—on track for a comfortable retirement. Let’s explore some tips for saving for retirement in your 40s.

Is It Too Late to Save for Retirement at 40?

If you’re wondering how to catch up on retirement savings in your 40s, we’ll start with the short answer: it is possible. And you’re not too late.

We may be bombarded with messages stating that we should have four times our annual income tucked away in retirement by the time we blow out the candles on our 45th birthday, but the truth is, you can start prepping for retirement contributions in your 40s. Besides, what’s the alternative?

The other truth, though, is that you may have to buckle down. Practice diligence (along with some smart strategies) to be comfortable when it comes time to unwind from your career.

6 Savvy Strategies to Catch Up on Retirement Savings in Your 40s

Saving for retirement—or any major life event, really—is a commitment and a practice. Here are six strategies you may want to consider implementing:

#1 Conduct an Assessment of Your Full Financial Picture

The rate at which you can catch up on your retirement goal depends on several factors, including:

  • Your income
  • Job growth within your company or as a freelancer
  • Your monthly expenses
  • Your spending habits
  • Your debt

You may have a solid understanding of the first point above, but only a vague understanding of what follows. Determining this, however, furnishes you with the ability to set financial planning goals—and to begin dedicating a certain amount of each paycheck towards retirement.

#2 Curb Unnecessary Expenses

Remember when we were in our 20s, footloose, and fancy-free—and retirement seemed like a lifetime away? Back then, dropping a bundle on an extravagant vacation or putting that Prada purse on a credit card seemed like no big deal.

Catching up on your retirement plan requires a lot more discretion and discipline regarding living expenses. Wherever possible, cut down on spending. A few tricks to try:

  • Dine in more than you dine out
  • Share streaming services with your family members
  • Cancel barely-used subscriptions and memberships
  • Save your credit for emergencies
  • Use a budgeting app to stay on top of your spending

These tweaks may seem minor, but they can have major effects. Why? Every dollar you put away has the potential to increase, thanks to the power of compound interest.2

#3 Arrange for Automatic Retirement Contributions

Automatic withdrawals from your paycheck and/or investments take discipline out of the equation. With each paycheck, arrange to have what you can sent directly to a retirement savings account, whether it’s your company’s 401(K) or a traditional IRA. 

Ideally, this will be a minimum of 10% of your annual income, pre-tax, but you may want to arrange to have more contributed after you’ve covered the following necessities each month:

  • Rent or mortgage
  • Utilities 
  • Groceries and gas
  • Insurance
  • Your emergency fund

This habit may allow you to save more than you think. If part of your income is immediately stashed away, you’ll begin to adjust to life accordingly—even if that means forgoing your daily stop at Peet’s Coffee.

#4 Open a Roth IRA

A Roth IRA is a terrific way to start accumulating tax-deferred dough.

For example, if you begin contributing $6,000 per year to a Roth IRA at the age of 40, you’ll have nearly $474,000 by the time you’re 65 (at an annual rate of return of 8%). And that’s no pin money, either.3

Keep in mind, though, that there are income restrictions for a Roth IRA—and your contribution limit, if you have one, is based on your salary.

#5 Eliminate Credit Card Debt

You might not have prioritized paying off your credit cards in your 20s and 30s, but the window to eliminate your debt back then was, well, wider. If you have a substantial amount of credit card debt, consider transferring it to a low-interest card, or strive for the debt snowball method:4

  1. Ensure you pay off the minimum on each of your cards per month.
  2. Aim to pay off the smallest balance first.
  3. Use the money you were using to pay off the smallest balance for the next card.
  4. Repeat until your debt is behind you.

You can also roll credit card debt into mortgage, or learn other ways on how to consolidate debt with bad credit

Key Takeaways

You may feel woefully behind if you’re in your 40s and have only just started to consider the importance of setting a chunk of your income aside for retirement.

With devotion and these strategies, however, relishing life in your golden years may become a palpable reality.


  1. CNBC. The age when Americans start saving for retirement.
  2. US Securities and Exchange Commission. What is compound interest?
  3. Investopedia. 6 late-stage retirement catch-up tactics.
  4. Forbes. The debt snowball method: how it works and how to use it.
Written by Meela Imperato
Senior Director of Brand and Content, Real Estate & Finance Journalist

This article is published for educational and informational purposes only. This article is not offered as advice and should not be relied on as such. This content is based on research and/or other relevant articles and contains trusted sources, but does not express the concerns of EasyKnock. Our goal at EasyKnock is to provide readers with up-to-date and objective resources on real estate and mortgage-related topics. Our content is written by experienced contributors in the finance and real-estate space and all articles undergo an in-depth review process. EasyKnock is not a debt collector, a collection agency, nor a credit counseling service company.