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Things to Do in Your 40s to Prepare for Retirement

| July 26, 2019
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3 Things to Do in Your 40s to Prepare for Retirement

While you’re still decades away from reaching retirement age, learning how to prepare for retirement once you’re 40 is critical to creating a viable retirement plan. With your peak earning years in your 40s but still decades away from retirement, your 40s are an ideal time to ramp up your savings for retirement, while also delving more into the details of planning for retirement.

The importance of retirement planning increases as you reach your 40s due to the amount of time you have to catch up and hit your retirement goals. In order to ensure you’re on the right path when you prepare for retirement in your 40s, we’ve compiled our top list of tips:

  1. Determine your Retirement Savings Goal to Start Retirement Planning

In order to determine when you can retire, you must first determine the amount of savings you’ll need to live comfortably once you stop working. To do this, you must figure out your retirement savings goal, which is the amount you want to have saved strictly for retirement.

While your retirement savings will vary based on your lifestyle and retirement location, the chart below details the ideal amount of savings you’ll want based on your age.

Source:Ally Bank


Ideally, you’ll want to start the process to prepare for retirement well before you reach your 40s, but if you wait until your 40s, you still have time to prepare for retirement if you implement proper investing and saving strategies. 

  1. Prepare for Retirement by Paying Off Debts

Spending your retirement years paying off large sums of debt is not an ideal way to enjoy your post-work life. While paying off a home is typical for people in their 40s, having large credit card debt or payday loans will hinder your ability to save for retirement.

When starting to prepare for retirement, allocating money towards your retirement accounts instead of paying off high-interest debts may seem like a good idea, but the amount of interest you’re responsible for paying can negatively impact your retirement accounts. High interest debts can quickly eat into your income and paying off the highest interest debt should be your priority.

Finding a balance between paying off debt and saving for retirement can be difficult to determine because you don’t want to completely ignore saving while paying off debts. Mitigating factors affecting how you will save and pay off debt depends on your age, salary, the amount of debt owed, and how much you’ve already saved for retirement.

 If you’re entering your 40s and have little to no debt, then allocating more income towards your retirement savings is achievable. However, if you’re nearing 50 and have vast amounts of high interest debt, paying off that debt first should be your priority.

Whatever your debt to savings ratio is, speaking with a financial consultant can help you prioritize your savings to help guide you on the financial path toward retirement.

  1. Take Chances with Your Investment

Protecting your retirement assets should always be a top priority when it comes to how you prepare for retirement. While relying on less risky investment like CDs or money market funds is a solid investment strategy, the rate of return is much lower than riskier investments like stocks.

A common retirement account that carries risk associated with how the stock market performs is a 401(k) account. While investing in your 401(k) has no guarantee of a high rate of return, it is a good tool to use to help spread your investments across a wide network of strategies.  The chart below highlights the amount every person should have in their 401(k) at certain ages:



In addition to 401(k) accounts, other methods to enter the stock market include index funds, mutual funds, and exchange-traded funds (ETFs). Investing in multiple avenues allows investors to spread risk across a variety of markets.

To help workers achieve their goals when planning for retirement, speaking with a financial advisor, like Matt Logan, can help steer prospective retirees toward a savings and investment strategy to help achieve the ideal retirement fund for every client.

Matt Logan has vast financial experience to help every client maneuver through the challenging retirement market. If you’re in need of better financial planning or looking for better investment strategies to help your retirement planning, Matt Logan has proven financial techniques geared to fit your financial situation. Don’t hesitate to reach out to Matt Logan to see how he can help you achieve your retirement goals. Give a call today: 336-540-9700.

Matt Logan is a Representative with Matt Logan Inc and Summit Brokerage and may be reached at, 336-540-9700 or [email protected].  

Matt Logan Inc. is an independent firm with Securities offered through Summit Brokerage Services, Inc., Member FINRASIPC. Advisory services offered through Summit Financial Group Inc., a Registered Investment Advisor. Summit Brokerage Services, Inc., its affiliates and Matt Logan Inc. do not give tax or legal advice. You should consult an experienced professional regarding the tax consequences of a specific transaction. These are the views of Matt Logan Inc, and not necessarily those of Summit Brokerage Services, Inc. and any of its affiliates and should not be construed as investment advice.

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