Mid-Life Money Moves: Catching Up on Retirement Savings in your 40s

If you’re among the 21% of U.S. adults who regret not saving for retirement sooner¹, there are still practical strategies available to help you catch up in your 40s.

Starting earlier gives retirement savings more time to grow, but many people reach their 40s without having had that opportunity. Life events, debt, housing costs, and family responsibilities often delay retirement savings. The good news is that while starting as a late millennial is not ideal, it is far from hopeless.

Key Takeaways

Am I behind on retirement savings for my age?

Before you panic, it’s important to know where you stand.

People aged 45 to 54 that have retirement accounts report an average balance of $313,220, but the median balance is$115,000². The large gap between the average and median shows that a relatively small number of high-balance savers skew the average upward. The average may look strong, but it doesn’t reflect what most people have saved.

Financial institutions often suggest having roughly three times your annual salary saved by age 40 as a general benchmark³. If you are below that benchmark, remember that these can be used as useful reference points, not pass-fail.

Instead, focus on answering three questions:

Your 40s can be a pivotal decade because retirement is still far enough away for your investments to grow, but close enough that small course corrections can make a meaningful difference. The goal isn’t to compare, it’s to understand your starting point so you can build a realistic plan to move forward.

How can I catch up?

As an older millennial, retirement is still likely 20 years or more away. That means time and compounding can still work in your favor. The key is to be intentional about how you use the years ahead.

New York Life identifies several strategies that may help people strengthen their retirement savings, including¹:

Increase retirement contributions,

especially if you’re not receiving your full employer match
Use tax-advantaged accounts

such as 401(k)s and IRAs to maximize long-term growth potential
Put raises, bonuses, and tax refunds to work

instead of allowing lifestyle inflation to absorb them
Reduce high-interest debt

to free up more money for saving and investing
Review monthly spending

and identify areas where small cuts could create consistent savings
Consider additional income sources,

such as consulting, freelancing, tutoring, or other side work, and dedicate that income to retirement goals

The goal isn’t necessarily to make up for every missed year of saving. It’s to create a realistic plan that improves your financial position and gives your money as much time as possible to grow.

What does retirement mean to you?

Many retirement calculators assume you’ll fully stop working and no longer earn a paycheck. But for many people, retirement no longer works that way.

In fact, nearly 50% of retirees follow a nontraditional retirement path that involves partial retirement or unretirement⁴.

This shift is especially important for people who feel behind on retirement savings. A retirement plan doesn’t necessarily have to fund decades without any earned income. Instead, it may be possible to build more flexible plans that combine retirement savings, Social Security benefits, and part-time work.

As you think about your future, don’t just ask when you want to retire but think about:

Retirement is not one-size-fits-all. For many people, it has become a gradual transition, and that flexibility can create new opportunities for those trying to catch up.

How can a financial professional help you get on track for retirement?

If you feel behind on retirement savings, trying to figure out how much you need, how much to save, when to retire, and which accounts to prioritize can feel overwhelming. And you’re not alone. More than half of Americans (56%) have never calculated how much they’ll need in retirement, and only about one-third of pre-retirees have a plan ⁵.

A financial professional can help bring clarity by turning a broad goal into a strategy built around your income, savings, timeline, and desired lifestyle. They can help evaluate whether you’re on track, identify potential gaps, and recommend adjustments to your savings rate, investment allocation, or retirement timeline.

Perhaps most importantly, a financial professional can help you see opportunities rather than shortcomings. Many people assume they are too far behind to catch up, when they may still have decades before retirement, multiple sources of future income, and more flexibility than they realize. With a plan in place, the focus shifts from worrying about what wasn’t done in the past to making informed decisions about what can be done next.