Hitting your forties signals the prime of your earning years, a stage where your long-haul saving ventures should be cruising steadily. Yet, life’s curveballs often throw a wrench in the works. Financial advisors frequently highlight that while folks around 40 grasp the importance of socking away money, many still fall short of taking solid, concrete steps toward a well-rounded retirement plan.

A significant portion of people in their 40s wander without a clear blueprint for retirement savings. Others manage to set some money aside but not at the level needed to build a meaningful safety net. This decade tends to bring hefty bills, like footing the bill for college tuition, which can seriously hamper efforts to bulk up your future nest egg.

“Most people stash what they can, do their best, and figure they’ll tally up the chips down the line,” says Bill Baldwin, ex-managing director at Argent Wealth Management in Waltham, Massachusetts. “However, it’s essential to crunch the numbers on what you’ll need post-retirement and how much your savings can realistically sustain your lifestyle.”

Kick Your Saving Strategy Into Higher Gear

Many in their 40s are cruising at a leisurely pace rather than hitting the throttle on saving. Partnering with a savvy financial advisor remains one of the smartest moves to accelerate your journey toward your monetary milestones. Bankrate offers tools that can guide you in ramping up your retirement stash.

For those aged 50 and above, the IRS allows an additional $7,500 to be tucked away annually into retirement accounts. Even a small bump—say, a 1% boost—in your contribution rate can significantly fatten your nest egg over time. If you haven’t jumped on the IRA bandwagon, you might be missing out on substantial tax perks designed to beef up your savings.

For instance, a Roth IRA offers the perk of tax-free growth on earnings down the line. But be mindful—eligibility to contribute to a Roth IRA hinges on income ceilings and other criteria set by the IRS.

In 2024 and 2025, the contribution limit for Roth IRAs rises to $7,000 annually, with a $1,000 catch-up contribution allowed for those aged 50 or older.

3. Nail the Right Investment Mix and Tame Risk

Allocating your assets wisely and diversifying remains crucial, now more than ever. At 40, retirement is still a good stretch away, so playing it too cautiously isn’t advised, notes Ellen Rinaldi, former Vanguard corporate director.

Your portfolio should still lean toward growth-oriented investments given you likely have more than two decades left before retirement.

While gradually increasing your bond holdings can temper the portfolio’s volatility, it will typically clip the wings on returns compared to stocks. This strategy cushions you from the rollercoaster ups and downs of equity markets.

Looking For Investment Guidance?

If you leave a 401(k) behind when switching jobs, consider rolling it over into an IRA—offering you full control over your investment choices—or moving it into your current employer’s retirement plan if it boasts strong offerings.

“It’s common for people to abandon their 401(k)s and later forget about them,” says Michael Scarborough, CEO of Oak Wealth Partners in the D.C. area. “Some spend more time planning vacations than their retirement, which is a costly oversight.”

Balancing Kids’ College Costs and Retirement Goals

Parents who’ve been funding college since their kids were toddlers might dodge draining their retirement coffers prematurely. Yet, those who neglected college savings and find their retirement nest egg lacking could face tough choices ahead. Financial experts stress that retirement savings deserve top billing since no grants or scholarships exist for that phase of life.

“Last time I checked, retirement scholarships don’t exist,” says Dee Lee, author of Women & Money.

Many parents delay building their retirement pots to financially support their children, even after graduation.

“When push comes to shove, folks prioritize their kids and often shortchange themselves,” explains Merl Baker, partner at NMG Consulting. “They come to terms with working longer or scaling back their lifestyle. It’s a compelling sacrifice.”

If you’re set on helping your offspring but funds are tight, explore compromises like opting for in-state colleges instead of pricier private or out-of-state options, easing the strain on your retirement funds.

6. Secure Adequate Insurance Coverage

With health care costs escalating year after year and life spans stretching longer, protecting yourself has never been more vital.

According to the Department of Health & Human Services, roughly 70% of retired Americans will require some form of long-term care. New York Life’s 2023 study estimates the price tag for three years of assisted living followed by two years in a nursing home can surpass $365,000.

Long-term care insurance premiums for a 55-year-old typically run into several thousand dollars annually, rising depending on the benefits’ inflation protection, as per the American Association for Long-Term Care Insurance.

While pricey, locking in coverage earlier is usually more affordable and ensures eligibility. Procrastinating until retirement looms may result in higher costs or denial of coverage altogether.

7. Enlist a Retirement Advisor

Feeling overwhelmed by the planning maze? A retirement advisor can be your beacon, guiding you through structuring your finances effectively. Seek out fee-only advisors—those compensated directly by you, often hourly—to dodge conflicts of interest common with commission-driven planners. Having a fiduciary in your corner ensures your best financial interests come first.

8. Ponder Extending Your Working Years

While delaying retirement might sound like a buzzkill, it can be a game-changer for your financial future.

Continuing to work adds extra income that you can funnel into savings or investments, bolstering your financial cushion. Unlike the grind of a full-time gig, you might opt for fewer hours or a part-time role, better aligning work with your lifestyle and expenses.

This approach not only amplifies your nest egg but also stretches the timeline for your investments to grow, especially handy if the market is in a slump when you originally planned to retire.

Even if markets are booming during your retirement countdown, working a bit longer can supercharge your portfolio’s value, setting you up for a more comfortable, worry-free retirement.