How to Start or Rebuild Retirement Savings in Your 40s

Elderly couple holding a wooden house and gazing at it

My husband and I didn’t start saving for retirement until our early 30s. We’ve had a slow start, and we’re still working hard to build our retirement. Other people wait even longer to build their retirement because they don’t have the money too spare or retirement savings is not a priority. And then there are the people who lose everything in a divorce and have to start over. If you’re in one of these situations and feeling despondent, now you can start or rebuild retirement savings in your 40s.

First Things First

Before you beat yourself up about your lack of retirement savings, recognize you’re not alone. According to CNBC, “the median 401(k) balance for Americans in their 50s is $57,000.”

How to Start or Rebuild Retirement Savings

Utilize Employer Matches

Many employers offer a match to your retirement savings. For instance, my former employer offered a generous 8 percent contribution match. If I contributed eight percent of my income to retirement, they matched that with eight percent from the company. That meant I was saving 16 percent of my salary in retirement.

Not all companies are so generous, but take advantage of the maximum amount your employer matches. If it’s five percent, try to contribute the full five percent of your salary to maximize the free retirement money your employer is giving you.

This makes a lot of sense because not only are you getting the free money from your employer, you’re also putting more of your money to work on the stock market.  This helps you build wealth through market appreciation and stock dividends. Both of these have been shown to be reliable sources of wealth for the last 60 years.

Save “Extra” Money


When you receive a raise, put that increase in your take-home pay straight into retirement savings. You’ll be amazed how quickly this adds up.

Tax Refunds

According to Time, “The average tax return for 2022 was $3,039.” If you received this size tax refund over ten years and put all of it in retirement savings, you’d have $30,390, not including the interest you’d make on your investments. This is an excellent way to jump-start your retirement savings.

Plan to Work Longer

You may have to work longer if you’re late to the retirement savings game. My grandfather worked for companies that paid low wages, so when he reached retirement age, he kept working. His retirement savings were small, so he worked into his early 80s until he got sick with cancer. By extending his working years, he did not experience financial hardship in retirement.

Take Social Security as Late as You Can

You can begin receiving Social Security payments as early as age 62, but waiting five more years significantly affects the amount you will receive for the rest of your life. According to the Social Security Administration, “If you turn age 62 in 2023, your benefit would be about 30% lower than it would be at your full retirement age of 67.” Not everyone can wait to receive benefits, especially if medical issues  plague them, but for those who can, waiting is worthwhile.

Final Thoughts

My husband and I are busy catching up with our retirement, as many other Americans are. There’s no easy way to accumulate the money you need for retirement, but small steps can add up and make a significant difference in your savings.

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