How to Save for Retirement in Your 30s and 40s
Retirement age can sneak up on us. That’s why, even if you’re in your 30s or 40s, you should get serious about saving. Here are some ways to get started saving for retirement while you’re making your way through your thirties and forties.
Max Out Your 401(k)
The easiest way to save for retirement when you’re in your 30s or 40s is to take advantage of a workplace 401(k).
- Aim to contribute the maximum amount allowed each year. Contribution limits are subject to change yearly. We realize that contributing the maximum is a tall order for many of us, so do what you can.
- If your employer matches your contributions, do what you can to contribute enough to get the match.
- Try stashing any bonuses or money windfalls into your 401(k).
- You can also slowly increase the amount you’re contributing over time. If you move it up slowly, you won’t miss the money as much, even small increases can add up over time.
Consistently contributing even a modest percentage of your income over time can significantly improve your retirement readiness.
Add an IRA
Now that you’re knee-deep in 401(k) savings, it’s time to add on an IRA. There are two kinds of IRAs, Traditional and Roth.
Traditional IRA
Tax Treatment
- Contributions are typically pre-tax, meaning they may reduce your taxable income in the year you make them.
- Taxes are deferred until you withdraw the money in retirement.
Withdrawals
- Taxed as ordinary income when you take distributions in retirement.
- Required Minimum Distributions (RMDs) start at age 73 (as of 2025).
Ideal for
- Those who want an immediate tax deduction.
- Individuals who expect to be in a lower tax bracket in retirement.
Roth IRA
Tax Treatment
- Contributions are made with after-tax dollars, so no immediate tax deduction.
- Earnings grow tax-free.
Withdrawals
- Qualified withdrawals (after age 59½ and the account being at least 5 years old) are tax-free.
- No RMDs for Roth IRAs during your lifetime (Roth 401(k)s still have RMDs unless rolled into a Roth IRA).
Ideal for
- Individuals who expect to be in a higher tax bracket in retirement.
- Those who want tax-free income in retirement.
Keep Going Strong
No matter what happens, don’t stop saving for retirement. When you’re just getting started in your career, there’s a good chance you’ll have some ups and downs. Remember to keep contributing to your retirement, even if it’s a small amount.
Do One Thing: Slowly increase your 401(k) contributions over time so you’re saving as much as possible.
*Fortera’s Wealth Management Team is here to help you work toward a strong financial foundation. Providing members with access to retirement planning solutions offered through Osaic Institutions. The licensed and experienced Financial Professionals of Osaic offer thoughtful guidance designed to help clients understand their options and financial priorities. We’re here to help you navigate important financial decisions and work toward your long-term goals. Visit our Financial Planning page to learn more or give our Wealth Management staff a call at 931.431.3315.
This material is provided for educational purposes only and is not intended as individualized investment advice. Original article by Chris O'Shea and adapted in partnership with SavvyMoney.
*Investment and insurance products and services are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Fortera Wealth Management is a trade name of Fortera Credit Union. Osaic Institutions and Fortera Credit Union are not affiliated. Products and services made available through Osaic Institutions are not insured by the NCUA or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by a credit union or credit union affiliate. These products are subject to investment risk, including the possible loss of value. For more information, please visit http://www.finra.org/ or http://www.sipc.org/. Members should consult a tax advisor for additional tax information.