Building Retirement Wealth in Your 40s: What the Average Couple Should Target

When you hit your 40s, retirement might start feeling more real. But here’s the challenge: how much should you actually be setting aside each month? The answer isn’t straightforward because it depends on your current savings level, lifestyle expectations, income trajectory, and when you plan to stop working.

That said, financial experts have identified several benchmarks that can help guide your strategy — whether you’re right on track or need to accelerate your catch-up plan.

The Salary Multiplier Benchmark

According to Fidelity research, here’s what your accumulated savings should ideally look like at key life stages:

• By age 40: You should have roughly three times your annual salary saved. If you’ve averaged $60,000 yearly through your 30s, aim for approximately $180,000 in retirement accounts.
• By age 50: The target jumps to six times your salary. For someone earning $60,000 annually, this means $360,000; for a $100,000 earner, it’s $600,000.

These figures assume consistent, tax-advantaged investing over time. For the average couple approaching or in their 40s, these benchmarks provide a helpful reality check. If you’re running behind, don’t panic — there are several ways to accelerate.

The Annual Savings Rate You Should Aim For

The percentage of income you should redirect toward retirement grows as you age:

• Your 20s: 10%-15% of gross annual income
• Your 30s: 15%-20% of gross annual income
• Your 40s: 20%-25% of gross annual income

According to Dennis Shirshikov, finance professor at City University of New York, being in your 40s requires a more aggressive approach. “This is your decade to capitalize on higher earning potential while you still have sufficient time for investments to compound,” Shirshikov explains.

Let’s say you’re earning $100,000 annually. Using the 20%-25% rule means saving $20,000 to $25,000 per year. Calculate based on your gross income if possible — it’s the most realistic measurement. As your earnings fluctuate during this decade, adjust your savings target proportionally. For couples where both partners work, each should aim toward this percentage independently based on their own income.

Maximize Tax-Advantaged Accounts

Your 40s represent your peak earning years, giving you a unique window to save substantially more than younger workers. This is when strategic account selection becomes critical.

Max out your 401(k) first: The 2024 contribution limit stands at $23,000 annually (or $30,500 if you’re 50+). If you have a spouse, they can contribute the same amount if employed.

Stack multiple account types: Beyond your 401(k), consider:

• Traditional or Roth IRA: Up to $7,000 yearly ($8,000 at 50+). These offer tax benefits and flexibility.
• Health Savings Account (HSA): If you’re enrolled in a high-deductible health plan, this is often overlooked. Money grows tax-free and can be withdrawn tax-free for medical expenses. After 65, withdrawals work like a traditional IRA. As Jason Dall’Acqua, CFP at Crest Wealth Advisors, notes: “An HSA is essentially a stealth retirement account with the best tax treatment available.”
• Taxable brokerage account: Once you’ve maxed tax-advantaged options, this provides flexibility for early retirement scenarios or additional wealth building.

Creating these different “buckets” of money with varying tax characteristics gives you more control in retirement and helps you optimize your withdrawals.

Live Intentionally Below Your Means

Even with higher income in your 40s, lifestyle inflation can sabotage your retirement plans. The solution isn’t deprivation — it’s conscious choices.

Paul Tyler, chief marketing officer at Nassau Financial Group, suggests finding just 5% of additional income to redirect toward savings: “Maybe you keep your car a few years longer or choose a vacation destination closer to home. These small adjustments compound significantly over a decade.”

This approach serves dual purposes: it accelerates your savings rate and creates a financial buffer. If life circumstances change — health expenses, job transition, or revised retirement goals — you’re not starting from zero. You’ve already built a cushion.

Reassess Annually

Your 40s span a decade of change. Income may rise, family situations shift, and market conditions fluctuate. Dennis Shirshikov recommends treating retirement planning as dynamic: “It’s wise to reassess your retirement goals and adjust your investment strategy accordingly. Consulting with a financial advisor can provide personalized guidance based on your specific circumstances.”

For couples wondering where the average savings for 40-year-old couples should be, use the benchmarks as your starting point, then personalize based on your unique retirement vision. Whether you’re exactly on track or playing catch-up, your 40s still offer substantial opportunity to build meaningful wealth before retirement.