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Here’s how much money you should have saved by age 40

Using analysis by Fidelity, Select explains what your savings should look like by the time you turn 40 so that you stay on track to hit your retirement goals.

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Editor's Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. Select will update as changes are made public.

Your 30s call for a lot of financial decisions. As you settle into your career, perhaps you see yourself applying for a mortgage for your first home or starting a family. These financial decisions are easier to navigate if you have good credit and significant savings that you hopefully started building early on in your 20s.

But as you work toward these financial milestones, it's important to remember just how much you still need to put away for retirement that isn't too far away. In fact, in your 30s you're about halfway there if you plan to retire by age 67.

To stay on track to retire at 67, you should have saved 3 times your income by age 40, according to retirement-plan provider Fidelity Investments. This guideline doesn't just include cash savings, but also comprises your retirement contributions in a 401(k) and/or IRA and any investments in index funds or through robo-advisors.

Unlike your 20s, you're probably more financially stable as you head into your 40s. For this reason, it makes sense to increase your retirement contributions so you can have 3 times your income saved by your 40th birthday. Make sure you are putting away enough of your paycheck into your 401(k) account to receive any company matches; otherwise, it's money left on the table.

Where to put your money in your 40s

There are a variety of savings and investing vehicles to consider beyond your 401(k). Each of these has its benefits when you're working toward a big goal like having significant savings in time for retirement.

High-yield savings accounts

A high-yield savings account is a good place to stash cash for short-term goals and any emergency savings. Consider an online savings account with no monthly maintenance fees and low (or no) minimum deposits and balance requirements.

Select ranked the Vio Bank High Yield Online Savings Account as the best account for earning a high APY. There is a minimum balance of $100 to open an account, and opting to get paperless billing will save you on any additional monthly charges.

If you don't want the expense of depositing $100 to open an account, consider the Marcus by Goldman Sachs High Yield Online Savings, which Select rated the best overall. While it currently offers a lower APY than Vio, Marcus offers no fees whatsoever and easy mobile access through its new banking app. The app is simple to use and allows you to set up recurring deposits, track your savings goals and see how much interest you've earned this year.

For savers looking for something straightforward, Marcus is the account to use when all you want to do is grow your money with zero conditions attached.


Anyone looking for a hands-off approach to investing should consider opening a robo-advisor account. Using computer algorithms and data, robo-advisors are essentially software platforms that invest on your behalf. They charge much lower advisory fees than a traditional financial advisor and setting up an account takes only minutes. And you'll see a much higher return than just leaving your cash in a savings account.

If you're looking for a robo-advisor that offers a range of investment vehicles, consider Wealthfront. You can sign up for a taxable brokerage account, but also traditional, Roth, SEP and/or a Rollover IRA. It also stands out for letting investors save for their kids' college years early on through a 529 account.

If you want something a little more hands-on, SoFi Invest® allows you to invest in ETFs or buy into IPOs.

IRAs and/or Roth IRAs

If your company doesn't offer a 401(k) or you want to contribute more to hit the goal of 3 times your salary by 40, you might also consider opening an IRA or Roth IRA (if you qualify). IRAs are tax-advantaged investment accounts, and they offer a range of investments for your money, such as individual stocks, bonds, mutual funds, CDs and cash.

Select reviewed dozens of IRAs offered by both traditional financial institutions and fintech firms. We ranked Betterment as our top choice if you're looking for access to a financial advisor.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.