How to Invest for Retirement When You're 40

You are never too young or too old to begin investing for retirement.

You are never too young or too old to begin investing for retirement.

Retirement may still feel like a long way off when you're 40. Yet, at the same time, you start having thoughts about your future security. You still have plenty of time to invest for retirement, however, as long as you start making plans now. Putting away some earnings in a safe place not only helps you to feel better about your future, but it also provides you with incentives as you watch your money grow at an increasing pace over time.

Find a trusted and reputable financial planner. Consult with more than one if you can. Ask about financial planning at work or through your bank. Ask friends, family or colleagues about the services they use. Investment firms, insurance companies and financial institutions specialize in financial planning. Professional planners explain the best ways to invest your money according to your income level.

Examine a 401(k) or other retirement plan at work, or ask a financial planner about investing in your own individual retirement arrangement. These are tax-deferred accounts, meaning they remain tax-free during the investment period until you start withdrawing from them after you reach age 59 1/2. Tax penalties, however, are assessed for early withdrawals.

Try to invest at least 15 percent of your income in your retirement fund. Investing 10 percent works well for people who start investing in their 20s, but you are 40 and haven't started saving, you will need to catch up in order to retire comfortably. The more you put into your savings each period, whether weekly or monthly, the faster your earnings increase. Your employer may offer matching contributions if you have a plan through your job.

Choose a portfolio that includes low-risk investments for retirement. Many mutual funds contain stocks that remain safe investments for retirement funds. High-risk investments may achieve better results early on, but you need to move them into low-risk investments as you get closer to retirement.

Check your portfolio frequently and readjust investments as necessary. You can do this quarterly, semi-annually or annually. Retirement investing often includes replacing under-performing funds with other investment choices.


  • Consider changing financial investors if you are not satisfied with the performance of your investments. If you have gained enough knowledge about the markets over time, you may be able to make your own investment decisions.
  • You know your needs better than anyone else, but seek advice from a financial professional if you do not wish to handle investing on your own.
  • Although it’s nice to think you can save adequately for retirement at 40, make plans to work longer than the usual retirement age, even if things look good. The market will always have its ups and downs. Many people who start investing for retirement at 40 have to work a few years longer than those who invested earlier to build up a secure retirement fund.

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About the Author

Jerry Shaw writes for Spice Marketing and LinkBlaze Marketing. His articles have appeared in Gannett and American Media Inc. publications. He is the author of "The Complete Guide to Trust and Estate Management" from Atlantic Publishing.

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