How Much Money Should I Have Saved By 40? The Key To Saving Enough For Retirement

By Minh Tong Reviewed by Nima Vahdat Updated Oct 12, 2023
How Much Money Should I Have Saved By 40? The Key To Saving Enough For Retirement

It will surprise many Americans to know how much you should have saved by 40 if you want to retire in comfort.

There’s no doubt that turning 40 is a huge milestone, but it can also cause financial anxiety. At this point, planning for retirement becomes a greater priority, but growing your savings can be challenging as you must still provide for your family and take care of your monthly expenses.


  • By age 40, you should have saved three times your annual income.
  • At age 40, you should have around $191,000 in savings.
  • Utilizing a Roth retirement account can help you save money in the future.

At age 40, the general savings guideline is to have three times your yearly salary put away. According to the Bureau of Labor Statistics, the median annual earning for 35 to 44-year-olds is $63,908, so you should have around $191,724. 

It is important to note that while this number is high, it is a general guideline and not a hard and fast rule. For many, putting away a large sum of money every month is challenging, but it’s essential to securing your financial future. 

How much does the average 40 year old have in savings?

If you’re still trying to wrap your head around saving $191,000, you’re not alone. In fact, the majority of people in this age demographic haven’t even opened a retirement account, and for the approximate 49% who have, their balance only averages around $60,000. 

There are many factors contributing to the lower retirement savings among this age group, despite a median net worth of $91,000, according to a 2019 Survey of Consumer Finances. The first is large student loans. 

The average student loan debt for a 40 year old is $44,864, equaling 22% of the total national student loan debt or $344 billion. 

Another contributing factor hindering saving is credit card debt. According to TransUnion, people aged 40-49 have an average of $7,600 in credit card debt, the highest in any age demographic. 

While lowering this number through debt relief services can lessen the financial burden, having high monthly payments makes it difficult to set aside money for savings. 

How to increase your savings once you turn 40

While it may be discouraging to find yourself behind on your savings goals at age 40, the good news is you can still catch up. 

Although you’ve missed out on receiving a significant amount of compounding growth had you started saving around your late 20s or early 30s, you can still create a comfortable nest egg for your future.

Here are a few ways you can use to increase your savings at 40:

Grow your emergency fund

One of the biggest threats to your retirement savings is an unexpected emergency. Unsurprisingly, as costs rise, the average amount people spend on emergencies has skyrocketed, reaching a whopping $1,400 average per event. 

If you don’t have that much put away in a traditional savings account, you may have to tap into your retirement fund to make ends meet. 

Once you reach 40, you should prioritize saving six months of expenses in a high-yield savings account. While this amount may seem steep, it represents additional expenses like medical bills and home repairs you may encounter. 

And once you’ve set aside six months’ worth of expenses, you should focus on paying down any student loans or credit card debt. 

You may be able to do this more quickly by utilizing debt consolidation services. Once you’re no longer paying off these debts, you can invest the money you were using for them back into your savings account. 

Negotiate your wages

While the reason you struggle to build your savings account may be due to overspending, your income could also be a significant contributing factor. If you’re not making enough to cover your monthly expenses, you won’t have enough money to put into a savings account. 

By the time you’re 40, you should have developed valuable skills that make you an asset at your workplace. Especially if you’ve worked at the same company for a long time, your experience can be invaluable. 

Take some time to research if you are receiving a competitive salary using sites like Payscale, the U.S. Bureau of Labor Statistics, and Glassdoor. 

If you find your pay is low, you may be able to negotiate with your employer for a higher amount. If they are unwilling to budge, you may consider searching for a new position that will provide fairer compensation.

If you’re unable to find a new position or don’t believe asking for a pay rise is feasible, you may want to consider adding a side hustle. By simply making and investing an additional $100 a week, you could increase your savings by $300,000 in 20 years if you receive a 10% annual return. 

Set lending limits

People in their 40s often find themselves in a challenging situation where they’re raising their children but also trying to support their aging parents. When trying to build your savings, you must set strict limits on how much you will lend to family members to help with their expenses. 

While it may be uncomfortable, you can sit down and talk with your parents about your budget and how much you can afford to give them. Another area that may seem harsh is prioritizing saving for your retirement over saving for your children’s college education. 

There are many options available to them to make college more affordable, including student loans, financial aid, and working part-time, whereas there are minimal, if any, programs to assist you if you retire without a large enough savings account. 

Start and contribute to a Roth retirement account

Roth IRAs are an excellent way to save money in retirement since they allow you to make tax-free withdrawals. While you won’t receive an immediate tax break when you contribute to them, the money you save in the future makes it more than worth it. 

If your retirement account is employer-sponsored, ask if they have a Roth version you can switch to. Many popular 401(k)’s now offer a Roth option that compounds with a traditional tax-deferred plan.

Set realistic goals

Once you reach 40, looking to the future becomes more important than ever. If you’re behind on your savings, you still have time to catch up, but you’ll need to be mindful and set realistic goals. Don’t expect to retire early or begin receiving Social Security when you turn 62 if your savings aren’t where they need to be. 

Set a goal to replace 70% to 80% of your income when you retire so you can live comfortably. While it may take some sacrifice now, you’ll be thankful you didn’t give up in a few decades.

At Americor, we understand the importance of managing your finances wisely. 

If high-interest debts are impacting your savings and financial well-being, explore our debt relief solutions, including debt settlement and debt consolidation, to regain control of your financial future.

If your debt has become unmanageable and you have difficulty making your debt payments each month, then you should consider negotiating a debt settlement and an affordable payment plan that suits your budget.

Talk to one of our certified Debt Consultants, for free, who can provide personalized advice tailored to your specific needs.

By taking proactive steps, you can put an end to your financial stress and work towards a brighter financial future. Remember, there is always hope for debt relief, and our team of experienced professionals are ready to guide you on your journey to regaining control of your finances.

For more information on Americor’s debt relief services, contact us today to see how we can help you eliminate your debts, and get on the fast-track to becoming completely debt-free!


Minh Tong

Minh leverages decades of experience in marketing, sales management and technology to provide high-level advice and lead new initiatives. Minh has a Bachelor of Science in Business/Managerial Economics from University of California at Irvine. He brings over 20 years of sales and executive management experience to the company and his responsibilities include customer service improvement, professional development, and carrying out communications and marketing. Originally from the east coast, Minh resides in southern California and enjoys spending time with his family, going to the beach, and playing a variety of sports.