How Much Should You Invest in Your 40s?

Your 40s is a crucial time for investing: If you’re not on track to retire, your 40s is really the last opportunity you have before investing for retirement becomes extremely difficult. That’s why if you’re in your 40s, you absolutely need to make sure that you’re on track to retire comfortably.

Whether you’re in your 40s and want to check if you’re on track to retire comfortably, or if you want to catch up on your retirement contributions, this guide can serve as a starting point that equips you with the tools you need to reach your retirement goals.

Here are six strategies to help you boost your progress toward your investment goals:

1. Calculate your retirement number and work backwards.

Your retirement number is the amount of money that you will need to retire comfortably. Your retirement number should not just be the bare minimum of what you think you will need—rather, your retirement number should give you an extra cushion to account for unexpected necessary expenses like large medical bills or other large emergency expenses.

One way to come up with a rough estimate of how much you need is to multiply your annual expenses by 25. Here are some examples of how to find a rough estimate of your retirement number based on your annual expenses:

$20,000 x 25 = $500,000
$30,000 x 25 = $750,000
$40,000 x 25 = $1,000,000

Once you find your retirement number, you can use an investment goal calculator to calculate how much you need to invest per month in order to meet your retirement goal.

Prepare for an earlier retirement—even if you want to keep working.

When calculating how much you need to invest per month to meet your retirement savings goal, keep in mind that most people retire earlier than planned.

When you use a savings goal calculator, it’s important to consider that most people retire earlier than planned—and not because they want to retire early. According to a 2024 report by the Transamerica Institute, 58% of retirees retired earlier than planned, and only 21% of those who retired earlier than planned did so because they were financially able to do.

The median retirement age is 62, even though the median expected retirement age is 67. The Transamerica Institute found that 83% of workers age 50+ expect to either retire at age 65 or later or to never retire, even though 58% of them retired at age 62.

This means that you should be conservative when you estimate the number of years that you will continue to work. It’s better to underestimate how many more years you will spend in the workforce than overestimate it.

Factor in inflation.

When you use a savings goal calculator, don’t use the highest return possible—instead, use lower rates of return to adjust for inflation. For example, if you expect a 10% rate of return, then maybe you should use a 7% return in your calculations to adjust for inflation. Or if you expect a 9% rate of return, then consider using a 6% rate of return to account for inflation.

Besides adjusting for inflation, using a lower rate of return could help you prepare for a variety of potential scenarios—not just the best-case scenario.

2. Invest at least 20–25% of your income.

Generally, you should invest at least 20–25% of your income—including your employer match!—for a comfortable retirement. However, if you’re in your late 40s with little to nothing invested, you’ll probably have to invest more than that to catch up.

3. Make monthly investment contributions to target a retirement savings goal.

You can also invest a certain amount per month to target a specific retirement savings goal.

The following chart tells you how much you need to invest to have $500k, $600k, or $700k by age 62, assuming an 8% rate of return and monthly compounding:

A chart says how much you might have to invest per month in your 40s to reach 500k, 600k, or 700k by age 62, assuming an 8% rate of return.
Column labels: Age; 500k; 600k; 700k. Chart data is as follows:
40 $698 $838 $977
41 $769 $923 $1,077
42 $849 $1,019 $1,189
43 $940 $1,128 $1,315
44 $1,042 $1,250 $1,459
45 $1,158 $1,390 $1,622
46 $1,292 $1,550 $1,808
47 $1,445 $1,734 $2,022
48 $1,624 $1,948 $2,273
49 $1,833 $2,199 $2,565

And here’s how much you might have to invest if you want to have 750k, 800k, or 900k by age 62:

A chart says how much you might have to invest per month in your 40s if you want to reach 750k, 800k, or 900k by age 62, assuming an 8% rate of return. Chart column titles are Age; 750k, 800k; and 900k. The chart data is as follows:

40 $1,047 $1,117 $1,256
41 $1,154 $1,231 $1,384
42 $1,274 $1,359 $1,528
43 $1,409 $1,503 $1,691
44 $1,563 $1,667 $1,875
45 $1,737 $1,853 $2,085
46 $1,937 $2,067 $2,325
47 $2,168 $2,312 $2,601
48 $2,435 $2,598 $2,922
49 $2,749 $2,932 $3,298

Finally, if you want to have $1 million by age 62, here’s how much you might need to invest per month:

This chart says how much you might have to invest in your 40s if you want to have 1 million by age 62, assuming an 8% rate of return. Here is the age you start investing followed by the monthly contribution:

40 $1,396
41 $1,538
42 $1,698
43 $1,879
44 $2,083
45 $2,316
46 $2,583
47 $2,890
48 $3,247
49 $3,665

4. Invest a lump sum.

You could also make a substantial difference to your financial future if you meet a lump sum investing goal in your 40s. If you invest a lump sum of $10,000 to $50,000 in your 40s, that could make a noticeable impact on your retirement account balance by age 62, the median retirement age.

While investing smaller amounts of money on a regular basis is more accessible to most people, lump sum investing could be right for you if you encounter a sudden windfall or if you’ve been saving your money up for a while and you just haven’t known what to do with it yet.

Even if you don’t have a lump sum to invest, these numbers could help you make your own investing goals. For example, if you don’t yet have $50,000 invested for retirement, you can use this chart to help motivate you to reach that investing goal:

This chart shows how a lump sum of 10k to 50k invested between ages 40 and 49 could grow by age 62, asusming an 8% rate of return.

The first number is the age you start investing, followed by the dollar amount that the lump sum could become by the time you reach 62. After the age, from left to right the dollar amount is for a lump sum of 10k, then 20k, then 30k, then 40k, then 50k:

40 $57,785 $115,571 $173,357 $231,143 $288,929
41 $53,357 $106,714 $160,071 $213,429 $266,786
42 $49,268 $98,536 $147,804 $197,072 $246,340
43 $45,492 $90,984 $136,476 $181,968 $227,460
44 $42,005 $84,011 $126,017 $168,022 $210,028
45 $38,786 $77,572 $116,359 $155,145 $193,932
46 $35,813 $71,627 $107,441 $143,255 $179,069
47 $33,069 $66,138 $99,207 $132,276 $165,346
48 $30,534 $61,069 $91,604 $122,139 $152,674
49 $28,194 $56,389 $84,584 $112,778 $140,973

And here’s how much $60,000 to $100,000 could grow by the time you reach age 62:

This chart shows how a lump sum of 60k, 70k, 80k, 90k, or 100k could grow by the time you reach age 62 if you invest it in your 40s. The first column is the age that you start investing; the second column is for 60k; the third column is for 70k; the forth column is for 80k; the fifth column is for 90k; and the last column is for 100k.
Here is the chart data:

40 $346,715 $404,501 $462,287 $520,072 $577,858
41 $320,143 $373,500 $426,858 $480,215 $533,572
42 $295,608 $344,876 $394,144 $443,412 $492,680
43 $272,953 $318,445 $363,937 $409,429 $454,921
44 $252,034 $294,040 $336,045 $378,051 $420,057
45 $232,718 $271,505 $310,291 $349,078 $387,864
46 $214,883 $250,697 $286,511 $322,325 $358,139
47 $198,415 $231,484 $264,553 $297,622 $330,692
48 $183,209 $213,743 $244,278 $274,813 $305,348
49 $169,168 $197,362 $225,557 $253,752 $281,946

5. Meet investing milestones by age.

While what really matters is how many multiples of your annual expenses you have invested—to retire, you need at least 25x your annual expenses saved—age-based investing milestones are still a good, quick way to determine whether or not you’re on track to retire.

According to Fidelity, you should have at least 3x your income invested by age 40 and 4x your income by age 45. As you’re approaching age 50, you should aim to have at least 6x your income invested for retirement.

Here are some examples of Fidelity’s investing milestones by age:

If you’re age 40 and earn $40,000, you should have at least $120,000 invested.
If you’re age 43 and earn $45,000, you should have at least $180,000 invested by age 45.
If you’re age 47 and earn $48,000, you should have at least $288,000 invested by age 50.

6. Reach 100k in investments as soon as possible.

The state of middle-aged Americans’ finances is not great: According to Vanguard’s 2024 report, “How America Saves 2024,” workers age 35–44 had a median of $35,537 in their retirement accounts, and workers ages 45–54 have a median of $60,763 in their retirement accounts. Similarly, Fidelity reports that the median account balance for indivuals in their 40s is just $38,600.

If you’re in your 40s and have less than 100k invested in your retirement account, you need to make having $100k in retirement savings your highest priority. No matter your age, you should make reaching 100k in investments as soon as possible one of your top financial goals—this goal is so important because that 100k generates much of the compound interest that builds the bulk of your retirement account balance.

This infographic shows why reaching 100k as soon as possible is your most important finanical goal:

This infographic from FIRE for Normal People has a line graph that shows that it could take 10.63 years to reach your first 100k, 5.67 years to reach 200k, 3.89 years to reach 300k, 2.97 years to reach 400k, and 2.40 years to reach 500k. Image text reads, "Reaching 100k is your most important financial goal. Your wealth starts to skyrocket after 100k even if you keep investing at the same rate." — Reaching 100k is your most important financial goal. Your wealth starts to skyrocket after 100k even if you keep investing at the same rate.

According to this infographic, if you invest an average of $500 per month with an 8% rate of return, it takes about:

10.63 years to reach 100k
5.67 more years to reach 200k.
3.89 more years to reach 300k.
2.97 more years to reach 400k.
2.40 more years to reach 500k.

And you don’t need to invest $500 a month to see your wealth skyrocket after you reach 100k. As a general rule, your wealth starts to skyrocket after 100k no matter how much you invest—but that doesn’t mean you should stop investing once you hit 100k.

For example, if you only invest $100 a month, it will take you:

25.54 years to reach 100k.
7.84 years to reach 200k.
4.79 years to reach 300k.
3.45 years to reach 400k.
2.70 years to reach 500k.

These examples show that you do NOT need to be rich to build wealth—you just have to make reaching 100k ASAP your top priority. If you want to accelerate your wealth building journey, reaching 100k as soon as possible is the single most important thing you can do.

To help you reach this important goal, I created this chart that shows how much you might need to invest per month or per year if you want to reach this goal in 15 years or less. This chart assumes you have an 8% rate of return, although there are no guarantees in investing:

This table shows how much to invest to meet your most important investing goal (investing 100k) in 1 to 15 years. Here is the chart data; the first column is the monthly investment and the second column is the yearly investment: $8,334 $100,000 $4,007 $48,084 $2,567 $30,804 $1,850 $22,200 $1,421 $17,052 $1,136 $13,632 $934 $11,208 $784 $9,408 $668 $8,016 $576 $6,912 $475 $5,700 $416 $4,992 $367 $4,771 $325 $3,900 $289 $3,468 — Meet your most important financial goal: investing 100k.

If you want to accelerate your wealth building journey, reaching 100k as soon as possible is the single most important thing you can do because that initial 100k will skyrocket the amount of compound interest you earn.

Bonus: Target your next 100k-interval.

If you already have 100k invested, target your next 100k interval. If you’ve already reached 100k in investments, target 200k. The exciting thing about this goal is that it’s much easier than reaching your first 100k. Your first 100k is notoriously the most arduous—but after you reach this milestone, compound interest starts working massively in your favor to skyrocket your net worth.

These six strategies—targeting your retirement number, investing at least 20–25% of your income, making monthly investment contributions to target a retirement savings goal, investing a lump sum, and reaching 100k in investments