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40-plus? It's not too late to start saving

You're 40 and you wear it well. Career-wise you're right on track. You no longer seek others' approval. And you finally figured out how to get your kids to soccer practice and guitar lessons at 6 p.m. on Wednesday night—in two different towns.

Now, about that nest egg.


From a retirement-planning perspective, this is the decade where the rubber meets the road.

Those who started socking money away sooner are best positioned to meet their long-term goals, of course, but there's still plenty of time to shore up your savings if you've been hitting the snooze button on your 401(k) plan for the last 20 years.

"For a lot of people, their 40th birthday is when they start thinking about their financial future in earnest," said Gregory Olsen, a certified financial planner and partner with Lenox Advisors, noting 40-somethings often have the insight and maturity to project with greater accuracy their future income needs.

(Read more: Slow, steady best investing approach for 30-somethings)

That figure, which differs for everyone, will depend on when you plan to retire, your projected life expectancy and whether you envision a low-budget retirement or one that includes trips to Europe and drinks at the club.

The Social Security Administration's life expectancy calculator offers general guidance on how long you may live, but you'll need to adjust the result to reflect your own health and family health risks.

When estimating your monthly expenses in retirement, factor in food, housing, transportation (car loan, gas and maintenance) and health care. (Remember, your home may be paid off by then and you'll no longer have to shell out for work-related expenses, but your health-care costs and travel budget will likely be higher.)

Next, determine how much, based on current projections, you'll be getting from guaranteed sources of income, including Social Security, trust funds (for the lucky few) and any pensions you may receive. Here again, you can estimate your future benefits on the Social Security Administration's website.

(Read more: Retirement saving on a ramen-noodle budget)

The difference between what you'll likely spend and how much you'll have in guaranteed income is the amount you need to save to maintain your standard of living, using tax-deferred retirement plans and taxable brokerage accounts.

Save up, stay healthy
Most financial planners recommend long-term savers sock 15 percent of their income away annually, maxing out tax-deferred 401(k)s and traditional IRAs first and then funneling extra savings into a Roth IRA.

A Roth IRA is funded with after-tax dollars, so you can't deduct your contributions. However, the earnings grow tax-free, and you won't need to begin a required minimum distribution at age 70½—or ever—allowing those dollars to continue generating compounded returns. That is one of the benefits of a Roth IRA vs. a standard IRA.

Married couples with a modified adjusted gross income of less than $181,000 can contribute the full $5,500 in 2014. Contribution limits kick in for those earning more.

(Read more: Are you sick over health-care costs?)

However, if braces and car repairs make it hard to save as much as you should, don't panic, says Bob Adams, a certified financial planner with Armstrong Retirement Planning.

Simply direct new sources of income to your savings going forward and make a conscious decision to moderate your discretionary expenses starting today.

"If you should receive employment bonuses, stock option proceeds, inheritances or other unexpected money, think very seriously about applying it first toward your larger savings goals." -Bob Adams, certified financial planner, Armstrong Retirement Planning

"If you should receive employment bonuses, stock option proceeds, inheritances or other unexpected money, think very seriously about applying it first toward your larger savings goals and not a new car, new bathroom or European vacation," Adams said. "These one-time windfalls can significantly jump-start your savings program."

You can improve your financial prospects greatly, as well, by keeping yourself healthy, said Olsen at Lenox Advisors.

"If you can't save more today, you can at least minimize future expenses by taking better care of yourself," he said. "Lose weight, quit smoking and exercise often, because one of the biggest expenses in retirement is health-care costs."

(Read more: Roth IRA, state income taxes don't mix)

Indeed, Fidelity Investments, which tracks retiree health-care costs, estimates that a 65-year-old couple retiring this year would need $240,000 to cover future medical costs—not including the cost of long-term care or any additional costs they might incur by opting for an early retirement before Medicare kicks in.

Expenses are higher still for those with chronic conditions like heart disease, diabetes and obesity.

Blend Images | Vetta | Getty Images

Invest in yourself
During your 40s, don't forget to invest in yourself, said Matt Saneholtz, a certified financial planner and chartered financial analyst with Tobias Financial Advisors.

"Your highest income-earning years are usually still ahead of you into your 50s, so keep investing in your human capital," he said. "Keep learning, utilize your employer's training programs, take classes and stay on the cutting edge, because who knows what's going to happen with the job market."

One of the biggest pitfalls to retirement planning, he noted, is losing your job and being unemployed for a year or more—which not only impacts the amount you're able to save but may force your family to drain your retirement savings.

(Read more: Have you reviewed your 401(k) plan lately?)

The other pitfall is being underinsured, Saneholtz said. If death or disaster strike, be sure your family—and your hard-earned nest egg—is protected with adequate health, life, auto and homeowner's coverage.

Other tips to ensure you don't outlive your savings down the road include maintaining an aggressive but diversified portfolio that consists of anywhere from 75 percent to 100 percent stocks, with any remaining percentage allocated to cash and bonds.

With a time horizon of 20 to 30 years before you retire, said Lenox Advisors' Olsen, you'll need that level of risk to grow your principal and offset the corrosive effects of inflation.

"Don't stress over how much you haven't saved," he said. "Get the facts in front of you, take your head out of the sand, and do the best you can with the time you have."

—By Shelly K. Schwartz, Special to CNBC.com

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