Retirement might feel light-years away—but your future self is already counting on you.
Your 40s are a time of juggling: career, kids, maybe even aging parents. But they’re also a prime opportunity to start shaping the retirement you want.
Think of it this way: saving for retirement isn’t just about money—it’s about freedom, flexibility, and living life on your terms.
“Personal finance is more personal than it is finance,” Kenny Davin, vice president and Fidelity branch manager in Fort Lauderdale, Florida, says. “At this age, take the time to understand your story, what's important to you, what’s your why, your goals, your values.”
That kind of soul-searching can be the spark that turns intentions into a plan. And while your priorities may shift over time, the habits you build now will help carry you forward.
Consider these 8 key moves to make in your 40s to help set yourself up for a successful retirement.
1. Nail down a budget
Your budget is the foundation of your financial future. Start by listing your essentials—housing, groceries, transportation, loan payments—and subtract them from your monthly take-home pay. Aim to keep those basics under 50% of your income.
Tip: Track your spending for a month. You’ll spot patterns, find places to cut back, and start building habits that can support your long-term goals. We’ll help you get going.
2. Protect yourself with insurance
Insurance can be your financial safety net. Keeping appropriate coverage can help protect your family, your income, and your assets from unexpected financial shocks.
- Term life insurance can be a smart move if you have kids or dependents.
- Disability insurance protects your income if illness or injury sidelines you.
- Umbrella insurance adds extra liability protection beyond your other policies.
Tip: Many people are underinsured without realizing it. Life changes like having kids, buying a home, or changing jobs are good times to review your coverage. Read Fidelity Viewpoints: Are you underinsured?
3. Plan for health care costs
Health care might not be top of mind in your 40s—but it should be. Fidelity estimates that a 65-year-old retiring in 2025 will need about $172,500 to cover medical expenses throughout retirement. That’s after Medicare.
One powerful way to prepare may be with a health savings account (HSA). It offers a triple tax advantage:1
- Contributions are made before tax or provide a tax deduction.
- Any growth is tax-deferred.
- Withdrawals are tax-free when used for qualified medical expenses.
To contribute, you’ll need a high-deductible health plan. These plans typically have lower monthly premiums but higher out-of-pocket costs. One important caveat: HSAs do offer big benefits but it’s important to choose your health plan based on your health and financial needs—not just HSA eligibility.
Bottom line: Health care may be one of your biggest retirement expenses. Planning now can help you avoid sticker shock later.
4. Build emergency savings
Life throws curveballs—job loss, medical bills, car repairs. Emergency savings help you handle them without derailing your long-term goals.
Many financial professionals, including Davin, suggest setting aside 3 to 6 months of essential expenses for an emergency.
There are plenty of variables that impact how much you need in this account, Davin added. Some people, like those with dependents or with unpredictable income, may need more. Some, like young singles, could get by with less.
Read Fidelity Viewpoints: How much to save for emergencies
Tip: Consider automating your saving. Set up direct deposit into a dedicated account. Small, consistent contributions build powerful habits.
5. Make the most of tax-advantaged accounts
Your 40s are prime time to ramp up retirement savings. And tax-advantaged accounts designed for retirement saving may be your best bet for long-term growth potential.
For most people, the options could include:
- a workplace savings plan like a 401(k) or 403(b)
- IRAs
- tax-deferred annuities
If your employer offers a 401(k) or similar plan, it’s a good idea to take full advantage. Try to contribute at least the amount that your employer will match (if available). Over time, try to aim for saving up to 15% of your pre-tax income, including that match.
Not there yet? Increase your contribution by 1% each year until you are. Many plans let you automate those bumps, so your savings rate automatically increases each year.
So how much should you aim to save for retirement? Fidelity’s guideline is 10x your income by age 67.2
Here’s a rough roadmap:
- 4x your income by age 45
- 6x by 50
- 8x by 60
“Take a breath,” says Davin. “You don’t need to hit the number overnight. But you can't fix what you won't face so don't avoid knowing your number and where you currently stand.”
6. Invest with confidence
When it comes to investing, simple is powerful. It can make good sense to start with the basics: asset allocation, diversification, and rebalancing. Focusing on growth potential with stocks, stock mutual funds, or exchange-traded funds can help make sure you’re positioned to benefit from potential long-term compounding.
“A relatively aggressive mix geared to equities typically makes sense at this age,” Davin says. “But it also comes down to your risk tolerance. I’d rather someone take on less risk and stay invested than panic and pull out when the market drops.”
Not ready to manage your own portfolio? Consider a target date fund. These professionally managed options help people get invested in a diversified portfolio that is aligned with their investment horizon.
“Saving as much as possible is often the biggest factor to focus on in this stage of life,” says Davin.
Read Fidelity Viewpoints: How to start investing
7. Wipe out credit card debt
Debt can quietly drain your finances—and your future. With average interest rates on cards topping 20%, it’s critical to act.
There are 2 popular strategies for tackling debt:
Avalanche method: Pay off the highest-interest debt first to minimize total interest paid.
Snowball method: Start with the smallest balance to build momentum and motivation.
Pick the one that fits your style and stick with it. Every dollar you free up is one you can redirect toward your future.
Read Fidelity Viewpoints: The debt snowball method vs. the debt avalanche method
8. Consider estate planning
Estate planning isn’t just for wealthy people. It can help provide peace of mind for everyone. Start with the basics:
- Create a will that outlines how you want your assets distributed, who will take care of your children (guardian for minors), who handles your estate and carrying out your wishes.
- Name beneficiaries on your financial accounts, including retirement plans and life insurance policies.
- Set up a living will with an advance health care directive, so your wishes are clear if you’re ever unable to make decisions.
- Designate powers of attorney (POA) for both finances and health care. These trusted individuals can act on your behalf if needed.
Being prepared can be one of the most loving things you can do for the people you care about.
Picture the life you’re building
Retirement isn’t just about covering the bills—it’s about living well. Whether it’s a cabin in the woods, a trip to Morocco, or just more time doing what you love, having a clear vision makes saving feel purposeful.
“Every dollar has a purpose, so name it,” says Davin.
And you don’t have to figure it all out alone. A financial professional can help you see where you stand, what levers to pull, and how to make your goals real.
“Don’t run away from it,” Davin says. “You have the power of time.”