How to Save for Retirement in Your 30s and 40s

Retirement will come quicker than you think. 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. (For 2025, that’s $25,000.) 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 will add up over time.

If you make $50,000 per year and contribute six percent of that salary, when you’re 75, you’ll have saved just shy of $1.2 million.

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.