:max_bytes(150000):strip_icc()/GettyImages-2232184852-afa32a2f576242e29b2acebc5bb352f1.jpg "How People in Their 40s Save for Retirement — And What “On Track” Really Looks Like")
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Key Takeaways
- Average retirement savings rates in workplace plans run about 11%–12% for workers in their 40s; try to move toward a 15%–20% total contribution rate to close the gap quickly.
- Median 401(k) account balances rise sharply from early 40s to late 40s.
- Data suggest the “typical” saver in their 40s has plenty of room to accelerate savings.
You hit your 40s and suddenly face a panic: Did I just blow my chance to build a retirement nest egg? It’s possible if you’re stretched thin by mortgage payments, kids’ activities (plus college expenses, if they’re close), and if you’re feeling stalled in your career.
The good news is that you haven’t missed the boat for your retirement—yet. Your 40s are a pivotal decade, but it’s not too late to get back on track and build serious momentum toward your nest egg.
A Retirement Reality Check
Your 40s often coincide with a cluster of financial life stages: Moves to larger (costlier) homes, child care or teen expenses, college planning, aging-parent expenses, and sometimes a career plateau or transition—all converge.
If you feel “behind” or like it’s “too late” to save for retirement, know that it’s not some moral failing on your part: it’s just math and life intersecting. It’s also not too late, since savers in this age group tend to see higher earnings, steady employment, and generous employer benefits. Indeed, saving for 20–25+ years into the future with compound growth gives you a fair shot at serious catch-up.
The Data Snapshot
According to Fidelity, the average retirement account balance for savers ages 40 to 44 was $109,100 in 2025, and grows to $152,000 for ages 45 to 49.
But median retirement balances matter more, since the very highest balances can skew averages. Put that way, Vanguard reports that the median 40-something household has just around $50,000 in total retirement savings, suggesting that half of all Americans in this age group fall below that amount.
Retirement contribution rates are also key: total employee + employer savings average between 11.5% and 12% for workers in their 40s, which is close to the 12% national average. If you’re contributing less than that, you’re leaving substantial future returns on the table.
| Average and Median Retirement Account Balance by Age Group (2024) | ||
|---|---|---|
| Age Group | Average | Median |
| <25 | $6,899 | $1,948 |
| 25-34 | $42,640 | $16,255 |
| 35-44 | $103,552 | $39,958 |
| 45-54 | $188,643 | $67,796 |
| 55-64 | $271,320 | $95,642 |
| 65+ | $299,442 | $95,425 |
Who’s ‘On Track’?
Households today are on track to cover about 78% of their recommended retirement needs on average, with half needing to make at least moderate changes—which means that only half are truly on track today. That said, 40s savers can still move into that latter group.
The math is clear: a 45-year-old who starts with $50,000 but then maxes out contributions for 20-plus years can build a million-dollar retirement fund by age 65, assuming reasonable average returns of about 7% a year.
How To Know If You’re on Track
Savings multiple: Aim to have saved about three times your annual gross salary by age 40, six times your salary by 50, and continue building toward 10 times your salary by 67. In other words, if you’re earning $65,000 a year at age 40, you should aim to have saved $195,000.
Contribution rate: Target 15% to 20% of gross income (including any employer match). If you’re saving 10% to 12% today, try to increase that by 3% to 5% annually until you’re there. If your employer matches 5% when you contribute 10%, you’ve hit that target.
Tips To Catch Up on Retirement Readiness
- Take the full match: Every dollar an employer contributes via a match is “free” for you. The average promised employer match today is about 4.6% of pay. Don’t leave it unclaimed.
- Automate increasing contributions: Automatically add about 1% to 2% each year or with every raise, which you may hardly notice in take-home pay, but that compounds impressively over time. Pair it with a “save everything” approach to one-time lump sums like bonuses and tax refunds directed into your retirement accounts, too.
- Adjust your investment mix: In your 40s, most investors still need a healthy allocation to stocks to reach typical retirement balances. You can “set it and forget it” with a year 2040-2050 target-date fund if you prefer to make that easier.
- Pay down expensive debt: Prioritize balances that charge a lot of interest (buy now pay later, credit cards, personal loans, etc.). For every dollar of interest you avoid paying, you have a dollar that can compound your savings.
Important
At 50, the IRS allows catch-up contributions, an extra $7,500 on top of the standard 401(k) limit in 2025, and an additional $1,000 to an individual retirement account. That means you can sock away a total of $39,000 per year.
