How Much Should You Have Saved around age 40?
In your 30s and early 40s often comes with competing financial priorities — from housing costs and student debt to family expenses. Federal Reserve data shows that while participation in retirement accounts for people age 35–44 remains relatively high, median balances have fallen in recent years compared with pre-pandemic levels. Investopedia
Key Facts from the Latest Data
- Participation: Roughly 61.5% of households aged 35–44 had retirement savings in 2022, the most recent data available. That’s higher than younger age groups and one of the strongest participation rates across age brackets. Investopedia
- Median Savings: Among those with retirement accounts, the median balance in this age group was about $45,000 in 2022. This median level — less affected by outliers — is lower than comparable figures from 2019. Investopedia
These figures indicate that while many in this age range do save for retirement, the progress has slowed or stagnated for many households compared with historical trends.
What This Means for Your Retirement Progress
The typical savings figures for ages 35–44 may feel modest relative to what people need for a secure retirement, especially as incomes and expenses both rise in midlife. Given the impact of rising costs — especially housing, childcare, and student loans — the data reflect a real challenge for many savers. Investopedia
Financial goals in this decade of life can get crowded out by everyday living expenses. But consistency in saving matters more than trying to time the market or make up lost time later.
Practical Perspectives on Midlife Saving
As I noted in the original Investopedia article:
Income growth in midlife has been uneven, with gains concentrated among higher earners, while housing affordability, student loans, and childcare costs have absorbed much of the rest. Investopedia
I also emphasized two behavioral reframes that can help savers build momentum:
1. Think in terms of expenses — not just income.
Retirement isn’t about replacing a paycheck; it’s about covering spending in retirement. A savings multiple based on expenses can be a more meaningful target than one based on income alone. Investopedia
2. Approach each raise with intention.
Every income increase presents a choice: boost retirement contributions or upgrade your lifestyle. Prioritizing the former can significantly improve long-term outcomes. Investopedia
Benchmarks That Work
There’s no one-size-fits-all number, but general planning guidance suggests aiming for savings equal to 2–3× your annual household expenses by your mid-40s. That target helps align retirement preparedness with real spending needs rather than arbitrary dollar amounts. Investopedia
Action Steps to Strengthen Your Retirement Position
Here are practical habits that can move the needle:
- Increase retirement contributions gradually — even 1% more each year adds up.
- Maximize employer retirement matches — it’s free money that should never be left behind.
- Separate retirement goals from other financial goals — treat your retirement contributions as non-negotiable.
- Review your investment allocation periodically — ensure it matches your risk tolerance and timeline.
Final Thought
If retirement saving feels slow in your 30s and early 40s, you’re not alone — the data shows this is a common experience. What differentiates long-term success is intentional and consistent saving over time, even when balances feel modest today.
Fetching benchmarks is useful. But building habits, focusing on expenses, and making incremental improvements year after year make a bigger difference in reaching your retirement goals.
If you’re in the Madison, WI area and want to understand how your retirement savings translate into future income, working with a retirement income specialist can help clarify next steps.
Eric Ludwig, PhD, CFP®, is a retirement income specialist and founder of Stockbridge Private Wealth Management, based in Sun Prairie, Wisconsin, serving clients throughout the Madison area and nationally.