A general rule of thumb is that you should have three times your annual income saved by the time you reach age 40. But there's more to the story than that.
The median weekly earnings of someone in the 35-44 age group is $1,385, according to the U.S. Bureau of Labor Statistics, as of the third quarter of 2025. This represents an annual income of $72,020. This means that the average 40-year-old American should have approximately $216,000 in savings.
Of course, there's no hard-and-fast number or rule that applies to everyone. A good savings goal depends not only on your salary, but also on your expenses and the amount of debt you're carrying.
If your savings balance is lacking, don't panic. You probably still have at least a couple of decades of working and investing to build your nest egg. But the sooner you take steps to get back on track, the easier it will be. It's essential to increase your savings rate, even if it requires some sacrifice.
Savings Account
What is the average savings at 40?
Don't have $216,000 saved? Neither does the average 40-year-old. The median retirement account balance of someone in the 35-44 age group is $45,000, according to the Federal Reserve Survey of Consumer Finances. And just over six out of 10 people have a retirement account at all.
The median net worth for this age group is approximately $135,000, which represents the total value of assets minus the total value of debts.
How to save more money at age 40
If you're behind on saving money at age 40, you probably still have two decades or more to make up for lost time. But you've also missed out on the substantial compound growth that you would have captured had you started saving money at age 25 or 30. Catching up is still possible, but you'll need to save more to ensure you aren't left with a retirement savings shortfall.
Here's what you can do to boost your savings in your 40s:
Negotiate your salary
You may think that if you can't save money, your problem is overspending. But that's not always the case. Sometimes the problem is that your income simply isn't enough to cover the bills and save enough for retirement.
By age 40, you've hopefully developed skills that make you valuable in the workplace. If you've been at your job for a long time, research your salary using sites such as Glassdoor and Payscale, along with U.S. Bureau of Labor Statistics data, to make sure you're being paid competitively. If your salary is on the low end, it may be time to make the case that you deserve a raise based on your accomplishments -- or to start searching for a new, better-paying position. If you're self-employed, it may be time to reassess your hourly or contract rates.
If you don't think that getting a pay raise or switching to a higher-paying job is feasible, then consider whether earning side income is a possibility. Collecting an extra $100 a week of income after taxes and investing that money could add nearly $300,000 to your savings over 20 years, assuming 10% annual investment returns.
Build a six-month emergency fund
An emergency is one of the biggest threats to your retirement planning. If you get sick or lose income when the stock market is down, you risk having to withdraw money from your retirement accounts at a loss -- and also being liable for taxes and an early withdrawal penalty.
Make saving six months' worth of expenses in a high-yield savings account a high priority at age 40. In your younger years, a three-month emergency fund may have sufficed. But, as you get older, your chances of a medical emergency are greater. Your requirements for an emergency fund also increase when you have kids or purchase a home.
Six months' worth of expenses might seem like quite a challenge, but you don't need to get there right away. Even a couple of thousand dollars will put you in a position where you don't need to tap into savings for every unexpected expense.
Save for retirement in the right places
If you have a 401(k) or similar retirement plan at work, it's a smart idea to increase your contribution rate to help catch up on savings. If you don't, be sure to open an individual retirement account (IRA) if you haven't done so already.
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Set limits on helping out family
Many people become part of the sandwich generation in their 40s because they're raising their own families while also trying to help their aging parents.
When you're behind on your own savings goals, you need to set hard limits on how much you can afford to help with others' expenses. If you want to help support your parents, then work the amount you can afford into your budget. Communicate with your parents and siblings about what they can expect from you.
You also need to prioritize your retirement savings over saving for your kids' college education. This may be difficult, but your kids have more options for funding their education -- such as financial aid, student loans, and working part-time -- than you'll have if you retire with little savings.
Be realistic about retirement planning
Retirement can seem like an abstract goal when you're in your 20s or 30s, but in your 40s, it may start to materialize on the not-so-distant horizon. This may create a new sense of urgency about saving money, which is a good thing.
Ensure you're setting realistic goals, especially if you're trying to catch up on saving. Don't plan on retiring early at age 50 or claiming Social Security as soon as you turn 62 if you're behind on your saving objectives. Most financial planners recommend replacing about 70% to 80% of your income when you retire, so keep this guideline in mind as you start to make retirement plans.
At age 40, you still have time to save for retirement, but you also don't have time to waste. Some short-term sacrifices now will pay off nicely in a couple of decades.
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