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Financial Planning in Your 40s

People are seated around a table celebrating a person's birthday with cake and food. Balloons in the background show a four and a zero for the birthday age of 40.

If you’ve just turned 40, you might feel you still have a long way to go before retirement. But by 49, it can seem much closer, especially if you’ve been paying down debt instead of saving for retirement.

The decade between ages 40 and 49 can have a significant impact on your financial planning. Whether you’ve just entered your 40s or are on the cusp of turning 50, if you haven’t gotten serious about financial planning yet, don’t put it off much longer. Get started now to help meet your retirement goals.

Defining the 40-Somethings

While popular culture still depicts members of the millennial generation as 20-somethings living with multiple roommates in urban apartments, the oldest millennials were born in 1981, putting them and a growing number of ‘80s-born babies in their early 40s.

Individuals in their mid-40s are sometimes considered “xennials,” a term encompassing later-born members of Generation X (born 1965–80) and older millennials. Those in their late 40s are firm members of Gen X, with birthdates in the early 1970s and careers that launched as employers continued eliminating pension plans.

That’s an important historical point that defines the retirement planning process for most individuals in their 40s. Most don’t have the security of an employer-provided pension and are more likely to have worked for multiple companies during their 20s and 30s. If they didn’t contribute to 401(k) plans early in their career or worked for companies that didn’t offer a plan, they’ll have less than the recommended amount saved for retirement and possibly have more concerns about how long their money will last.

Give Me Some Positive News

Individuals in their 40s are entering their prime earning years, giving them potentially more money to put away for retirement than they might have had before—or helping them make up for lost time.

Find the financial planning strategies for your age (and read ahead to get ready for the next stage).

Get Started Today

One size doesn’t fit all for financial planning in your 40s, and what strategies you take and how long until retirement can impact your overall planning. Do what you can, no matter where you are. Those in their early 40s might have less to invest, but compounding can help. Those in their late 40s may be able to contribute more because they are making more money.

Your 40s aren't too late to start financial planning. Getting started today can help you meet your goals.

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This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

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