Sign In

How to Prepare for Retirement in Your 30s and 40s

Share This Post

It’s important to prepare for retirement, whether it’s right around the corner or decades away. Decide what you plan to do in retirement and therefore how much money you’ll need in your retirement fund. What’s your H.E.A number? Do you have lofty goals of traveling, pursuing hobbies, and living in a grand home? Or do you plan to have a modest retirement, possibly downsizing to a smaller home and continuing to work into your retirement years?

Once you know what your goals are, prioritize how you will save to fund those goals, and how you will spend the savings when the time comes. Remember, retirement can last 20-30 years, so it’s important to be prepared financially.

Below are some recommendations for preparing for retirement in your 30 and 40s. Be sure to read our related posts on preparing for retirement at every age.


How to prepare for retirement in your 30s and 40s


Invest in income-producing assets.

This will help replace your income in retirement. For example, if you invest in a rental property with a 30-year mortgage when you are 30 years old, you’ll still have it paid off before retirement and then the rental income can serve as your retirement income. And if you use the 101 system to pay it off sooner, you can direct the rental income into your retirement portfolio.


Keep yourself healthy.

Sleep enough, take vitamins, drink water, and exercise. If you’re healthy, you’ll be able to use retirement funds for what you want, not for medical expenses.


Assess your savings.

Keep track of how close you are to your savings goals. If you’re just getting started with retirement savings, save 15-20% of your income. As a general rule of thumb, you should have a retirement fund of 3x your salary by the time you’re 40 to be on track.


Prioritize retirement savings.

Prioritize retirement savings over saving for a child’s education. There are financial aid options for college, but not for retirement. You will help your children more by being able to support yourself in your retirement than you will by relying on them to support you financially later, especially since that will likely come at a time when they are trying to raise their own families.


Top Tip:

No matter your age, the most important thing you can do to be financially prepared for retirement is save money. The earlier you start, the better, but it’s never too late. Starting today is better than starting tomorrow.

Sources: Department of Labor, Ameriprise, CNBC, Bank of America, Investopedia, IRS, Fidelity


Wealth Academy Member Exclusive: Log in to your existing account for exclusive access to content from the Wealth Academy course Learning to Think Like a Wealth Builder which provides different ways to calculate your retirement needs.

Not a member? Enroll in Wealth Academy today for access to advanced content including retirement calculators and courses on retirement planning.

Subscribe To The 101 Newsletter

Helpful financial tips, news and information sent to your inbox