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5 Immediate Steps to Start Planning for Retirement in Your 40s

According to a recent survey by, 80 percent of 40 year olds are behind on their retirement savings. If you are in your 40's, the clock is ticking: in about 20 years or so, you too will reach retirement age.

Remember: It is never too late to start saving for retirement. However, if you have not started saving, you need to start now.

Keep reading to find out what you need to do immediately to start planning for retirement.


Determine Your Retirement Numbers

Some experts say you should be shooting for eight time your ending salary, others argue you should be building towards $1 million. Some even say you will need closer to $2 million.

Opinions may vary on how much money is needed to retire comfortably. In reality, your retirement saving will be very particular to you. What is most important is that you determine your retirement number so you can start building your plan around it.


Start Incrementally Increasing Your Savings

Generally, it is recommended that you should save around 15 percent of your yearly income for retirement. In reality, that might no be enough, especially if you're getting a late start.

If the financial discipline is hard to muster, set up an external savings account where a portion of your paycheck is automatically deposited.



Save For Yourself First

To help others, we must first help ourselves, and that means putting your retirement savings before other important money responsibilities. It's merely about prioritization.


Lower Your Debt

Pay off any outstanding debt you have and prioritize by starting with high-interest loans first, like credit cards. If your debt is too large, seek out alternative solutions before it compromised your retirement. See if consolidating your debt with a zero-interest credit card or a low-interest personal plan are options for you.


Minimize Spending

According to Financial Mentor, the value of a $5 coffee when you're 40 can compound to over $1,000 by the time you're 80. Now think about how much the rest of your frivolous spending can add up over time, potentially tens of thousands. Alleviate this loss by spending less on things you don't need- like magazine subscriptions and low-priority shopping- and pocket the savings in your retirement fund.