17 Apr How to Build Wealth and Save for Retirement in Your 40s

Estate planning and retirement planning go hand in hand. Just like it’s never too early (or too late) to start saving for retirement, it’s always good to begin the estate planning process sooner rather than later. The good news? Even if you’re just getting serious about retirement savings in your 40s, you still have time to build wealth and set yourself up for a comfortable future. You just need to make a solid plan and some smart financial moves.

Is 40 Too Late to Start Saving for Retirement?

The short answer is no, it’s not too late. Would it have been easier to start saving in your 20s? Of course, but that doesn’t mean you can’t still grow your retirement fund and secure your financial future. In fact, your 40s are a prime time to focus on building wealth, because you’re likely in your peak earning years. The key is to make the most of the time you have left before retirement.

Five Smart Moves to Grow Your Wealth in Your 40s

1. Max Out Your Retirement Contributions

Now is the time to take full advantage of building your retirement accounts. If you have access to a 401(k) through your employer, contribute as much as you can—especially if there’s a company match. 

If you don’t have a 401(k), an IRA is also a great option. A traditional IRA lets you pay fewer taxes now, while a Roth IRA will give you tax-free withdrawals in retirement. Depending on your income and tax strategy, you may want to have both.

2. Diversify Your Investments

A solid retirement strategy isn’t only about saving—you also need to focus on making that money work for you. Diversify your investments with a mix of stocks, bonds, and real estate to balance risk and potential growth. If investing feels overwhelming, consult a financial advisor who will help you create a personalized investment strategy.

3. Pay Down High-Interest Debt

Credit card debt and high-interest loans can drain your wealth-building efforts. The sooner you tackle those, the more money you can put toward retirement savings and investments. Focus on paying off high-interest debt first, while still contributing to your retirement accounts.

4. Increase Your Income

Your 40s are a great time to look for opportunities to increase your income, whether through negotiating a raise, changing jobs, or starting a side business. The key is to avoid lifestyle inflation. Just because you are making more doesn’t mean you should spend more! Instead, funnel that extra income into your retirement accounts, investments, or a trust fund that will benefit your family in the long-term. 

5. Plan for Healthcare

Healthcare expenses can be a major drain in retirement. If you have access to a Health Savings Account (HSA), it can be a powerful tool for managing future healthcare costs. HSAs offer significant tax advantages, including pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. Contributing to an HSA now can help ease the burden of healthcare costs in retirement. 

Estate Planning Can Help You Build Long-Term Wealth

Building wealth can help you save for retirement, but you also need to protect the assets you’ve already accumulated so you can pass them on to future generations. Without an estate plan, your assets could be subject to unnecessary taxes, get tied up in legal battles, or even end up in the wrong hands and become a burden for your loved ones. A well-structured estate plan will protect your assets and preserve as much of your wealth as possible for your loved ones.

Get Started Today, No Matter Where You Are in Life

Your 40s are a critical time for financial planning, but it’s never too late to start saving for retirement and building wealth. The key is to take action now. Maximize your retirement contributions, invest wisely, pay down your debt, and protect your assets with a solid estate plan.

At Phelps LaClair, we specialize in helping families protect their wealth and plan for the future. Whether you’re creating an estate planning for the first time or updating an existing plan, our team is here to help. Contact us today to schedule a consultation and take the next step in protecting your legacy.

Photo by Dennis Thompson on Unsplash used with permission under the creative commons license for commercial use 1/31/25.