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How Much Should a 40-Year-Old Have Saved for Retirement?

Personal Finances 3 min read

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Are you 40 years old and concerned about your savings? Just how much should you have saved for your retirement by now? There’s no precise answer to give you, but there are some savings recommendations based on income. If you don’t meet these suggestions just yet, don’t panic. The key is to get on the right track right away, and these guidelines can help you do exactly that.

Income-Based Savings for a 40 Year Old

While some financial advisors suggest having your savings match your annual income, others suggest a more ambitious goal of having three times your salary in savings. That means an estimated savings range of:

Income Estimated Range in Savings
$50,000 $50,000 — $150,000
$75,000 $75,000 — $225,000
$100,000 $100,000 — $300,000
$150,000 $150,000 — $450,000
$200,000 $200,000 — $600,000

Financial Goals for Your 40s

By your 40s, you should focus on these three financial goals if you don’t already have them in order:

  1. Pay off as much of your credit card and consumer debt as possible
  2. Ensure your emergency fund is ready and available if and when you need it
  3. Grow your retirement account, even on its own

Are you struggling to make these things happen? You might consider the tips below to help you get on the right track.

  • Create a budget. By knowing how much you spend each month, whether on eating out, fixing home repairs or car problems, or paying phone bills, you can more easily visualize how much you need to save.
  • Take advantage of employer-matched retirement. Whether it’s a 401(k) or an IRA plan, or something entirely different, make the most of what your employer is offering you. It’s the easiest and least painful way to save money for retirement.
  • Learn what counts as a true emergency. Differentiate between what should require you to dip into your savings and what isn’t a true necessity.

If you need assistance planning for your future and creating a solid savings, First Bank* can help. First Bank is a community bank and has been helping residents of North Carolina and South Carolina reach their financial goals since 1935. Find a branch near you to speak with a financial advisor today.

———

Sources:

Time: http://business.time.com/2012/09/21/what-you-should-save-by-35-45-and-55-to-be-on-target/
Forbes: http://www.forbes.com/sites/learnvest/2013/10/24/40-money-things-you-need-to-know-by-40/#4c620e126cb4

Investment and insurance products and services are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Osaic Institutions and FB Wealth Management, a division of First Bank, are not affiliated. We do not provide tax advice. Consult your tax advisor. Investment and Insurance Products are:

Not Guaranteed by the Bank Not FDIC Insured Not a Deposit
Not Insured by Any Federal Government Agency May Lose Value including Loss of Principal

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