July 25


How Much Does the Average 40-Year-Old Really Have Saved for Retirement? The Numbers

By Harrison O'Reill

July 25, 2023

According to recent studies, the average 40-year-old has saved around $63,000 for retirement. While this may sound like a decent amount, it falls far short of the recommended savings needed to maintain a comfortable lifestyle in retirement. Experts suggest that individuals should aim to have at least 3-6 times their annual salary saved by age 40.

Factors such as income, financial plan, and lifestyle choices all play a role in determining retirement savings. Those who start saving early and consistently contribute to retirement accounts tend to have more savings by age 40.

However, unexpected life events such as job loss or medical expenses can also impact savings. It’s important for individuals to regularly assess their retirement savings and make adjustments to their financial plans as needed.

Retirement Savings

Saving for retirement is an important financial goal that everyone should prioritize. The earlier you start saving, the more time you have to benefit from compound interest. Retirement savings can come in many forms, such as employer-sponsored retirement plans, individual retirement accounts (IRAs), and personal savings.

Retirement Accounts

Retirement accounts, such as 401(k)s and IRAs, are popular ways to save for retirement. These accounts offer tax advantages and can be invested in a variety of assets. Many employers offer matching contributions to 401(k) plans, which can significantly boost your retirement savings.

Average Retirement Savings by Age

The amount of retirement savings you need depends on your age, income, and lifestyle. According to a recent study, the average retirement savings for a 40-year-old is around $63,000. However, this amount falls short of retirement savings benchmarks, which recommend saving at least three times your salary by age 40.

Social Security

Social Security is a government program that provides retirement income to eligible individuals. The amount of Social Security benefits you receive depends on your earnings history and age at retirement. While Social Security benefits can provide a source of income in retirement, they may not be enough to cover all of your expenses.


Investing can be a great way to grow your retirement savings. There are many options available, including stocks, bonds, mutual funds, and exchange-traded funds (ETFs). It’s important to do your research and choose investments that align with your goals and risk tolerance.

When investing, it’s also important to consider the fees you’ll pay. Commission fees can eat into your returns, so it’s important to look for low-cost options. Fidelity and Vanguard are two popular investment companies that offer low-cost options for investors.

One popular investment strategy is to invest in index funds. These funds track a specific market index, such as the S&P 500, and offer low fees and broad diversification. This can be a great option for investors who want to minimize risk and maximize returns over the long term.


Debt can be a major obstacle to saving for retirement. The average 40-year-old has a debt that includes mortgages, car payments, credit card debt, and student loans.


Student loans are a particular concern, as the average 40-year-old still owes around $35,000 in student loan debt. This can be a significant burden, as it can take years or even decades to pay off.

It’s important to prioritize paying off high-interest debt, such as credit card debt, before focusing on retirement savings. This is because the interest on debt can quickly add up and make it difficult to make progress toward financial goals.

Emergency Savings

Emergency savings is an important aspect of financial planning, especially when saving for retirement. It is recommended that individuals have at least three to six months’ worth of living expenses saved in an emergency fund. This fund should be easily accessible in case of unexpected events such as job loss, medical emergencies, or major home repairs.

Transaction Accounts

Transaction accounts, also known as checking accounts, are a good option for emergency savings. They offer easy access to funds and are FDIC-insured up to $250,000. However, these accounts typically have low-interest rates, so they may not be the best option for long-term savings.

High-Yield Savings Accounts

High-yield savings accounts are a great option for emergency savings. They offer higher interest rates than traditional savings accounts and are FDIC-insured up to $250,000. These accounts may require a minimum balance to earn interest, but they offer easy access to funds in case of an emergency.

When choosing a high-yield savings account, it is important to compare savings rates and fees to find the best option for your needs. Some of the best savings account currently available include Ally Bank, Marcus by Goldman Sachs, and Discover Bank.


In conclusion, the average 40-year-old has saved around $63,000 for retirement, which is not enough to sustain a comfortable lifestyle in retirement. It’s important to have financial goals and retirement goals in place to ensure that you are saving enough for your future.

One way to achieve these goals is to start saving early and consistently. This can be done by setting up automatic contributions to a retirement account, such as a 401(k) or IRA.

Another important factor is to consider your current lifestyle and expenses and how they may change in retirement. This can help you determine how much you need to save to maintain your desired lifestyle.

Overall, it’s never too late to start saving for retirement. By taking small steps and being consistent, you can work towards achieving your financial and retirement goals.

Frequently Asked Questions

Here are some common questions about retirement savings for 40-year-olds:

What is the average retirement savings for a 40-year-old?

According to a recent study, the average retirement savings for a 40-year-old is around $63,000. However, this number can vary widely depending on factors such as income, location, and lifestyle. It’s important to remember that this is just an average and not a one-size-fits-all number.

How much should a 40-year-old have saved for retirement?

Financial experts recommend having at least three times your annual salary saved for retirement by the time you turn 40. So, if you make $50,000 a year, you should aim to have $150,000 saved by age 40. Of course, this is just a guideline, and your individual circumstances may require you to save more or less.

How can I catch up on retirement savings if I’m behind?

If you find yourself behind on retirement savings, don’t panic.

There are several steps you can take to catch up, including increasing your contributions to your retirement accounts, delaying retirement to give yourself more time to save, working with a financial advisor to create a personalized savings plan, and cutting back on unnecessary expenses to free up more money for savings.

Remember, it’s never too late to start saving for retirement, and every little bit helps.

You might also like