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Financial Planning in Your 40s
January 3, 2025
You’ve reached your 40s and while you’ve gained some wisdom in your years, you’re still learning and growing. Unlike your 20s and 30s, saving for your future in your 40s is different because you’re different now too. No matter how far off retirement may still seem, it’s important to make sure you’re planning ahead so that you feel financially secure when the time is right to finish your professional career.
Ameris Bank can help you save as much as possible while still enjoying the next few decades. Here are a few tips to guide your financial planning:
There’s no textbook rule that states you must retire at 65 and in fact, many people can’t afford to. Every professional has a different path and needs. Some are hoping to retire early in their 50s and others hope to work as long as they can—it all depends on the person. And important first step is to determine where you ideally fall in this timeline to identify how much money you should set aside for retirement.
Typically, your retirement fund should be around 3 times your yearly income. The average American in their 40’s makes around $73,000. So, if you started to set aside money early and are around this income bracket, you should ideally have around $219,000 at this point. If you have not begun to set aside money yet, have no fear – it’s still possible to prepare yourself for a comfortable retirement if you’re diligent.
Do you have a retirement plan through your employer? Take advantage of employer-provided 401(k) or IRA match programs so you can make the most of your retirement savings. Some companies will match up to 6% of your retirement contributions, depending on the program. In addition to your employer’s program, you can open an IRA on your own.
It’s also important to know what your retirement goals are. Will you be spending your retirement relaxing on a waterfront property? Traveling the world? Are you aiming to retire a millionaire in 20 years? Or do you just want enough to live a similar life to what you have and watch your grandchildren grow up? No matter your goals, identifying them early on will help you reach them financially.
A sudden job loss or medical emergency can take a toll on your savings account. Make sure you’re prepared for the worst and financially stable enough to handle anything life may throw at you.
An emergency fund is especially important in your 40s, when many of you are financially responsible for other people in your life like children or even your parents. If you are raising a family, be sure you have enough money saved to support your children as well. By creating an emergency fund, you can safely stow away savings for a potential emergency. We recommend creating a separate savings account that is solely dedicated to emergencies that is easily accessible. Avoid relying on stocks or bonds as a form of emergency money since it is not an immediate way of withdrawing funds if necessary.
According to Bankrate.com, nearly 59% of U.S. adults are uncomfortable with their level of emergency savings. Ideally, you should have around three to six months’ worth of living expenses tucked away in your emergency fund. That way your groceries, routine medical expenses and even your mortgage can still be maintained in the event of an emergency.
The average adult in Virginia, for example, spends over $2,100 a month on both essential and nonessential items. Therefore, in their 40’s they should have around $6,300 to $12,600 stowed away in an emergency fund.
Take advantage of setting up recurring deposits to your Ameris Bank savings account. Automatic transfers like these can make it easier to save. Consider saving a healthy portion of your monthly paycheck to set yourself up for future success. A general rule of thumb is to set aside 20% of your income to your savings each month.
If your kids are headed to college, it’s important to find a balance between helping fund your child’s education and saving for retirement. Like retirement, the sooner you start saving for college, the better. Start a college fund as early as possible and calculate what you are able to afford and whether you might qualify for financial aid. It’s important to be realistic about the cost of tuition, so encourage your child to seek out scholarships or grants to help defray the cost.
No one wants to think about what will happen to our families after we’re gone, but it’s important to have a plan in place. Proper documentation can ensure your family is taken care of. For this reason, it’s imperative to have an estate plan at hand, which identifies who will inherit your money and possessions after you pass away. A simple will can be drawn up online, but your trusted attorney can prepare one as well.
Your estate is comprised of everything that you own, whether that is a car, home, checking and savings accounts and so on. Having an estate plan ready in case of an emergency is a great way to ensure your estate is delegated to those whom you’ve decided are fit to acquire.
You should also plan and create a living will as a part of your estate plan. A living will is an important legal document that includes your personal choices of end-of-life treatment when the time comes. Your living will is quite different than your last will, which explains how your want your assets handled after death, such as naming the legal guardians of your children.
It’s important to have your estate planning in order to ensure that your financial assets and property are well taken care off after you are gone, to set help set your family up for success.
Are your paying off monthly loans for your car or mortgage? Is student loan debt still looming over your head? The average student loan debt for Americans in their 40s is over $44,000. According to this study, the amount of your monthly debt payments should be no higher than 36% of your monthly income. Set aside monthly payments and work hard to minimize your debt so you can put as much as possible toward your retirement savings.
Planning in your 40s is important to your financial future and the future of your family. At Ameris Bank, we can help guide you toward your goals. Contact us today or stop by one of our local branches in AL, FL, GA, MD, NC, SC, TN, or VA to get started.
Information presented in the Financial Advice website is provided for educational purposes only and is not related to Ameris Bank's actual products or services. Ameris Bank makes no representations as to the accuracy, completeness or specific suitability of any information presented. Information provided should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. Ameris Bank recommends you consult a professional for any specific guidance you are seeking.
Ameris Bank can help you save as much as possible while still enjoying the next few decades. Here are a few tips to guide your financial planning:
What Does Retirement Look Like for You?
There’s no textbook rule that states you must retire at 65 and in fact, many people can’t afford to. Every professional has a different path and needs. Some are hoping to retire early in their 50s and others hope to work as long as they can—it all depends on the person. And important first step is to determine where you ideally fall in this timeline to identify how much money you should set aside for retirement.Typically, your retirement fund should be around 3 times your yearly income. The average American in their 40’s makes around $73,000. So, if you started to set aside money early and are around this income bracket, you should ideally have around $219,000 at this point. If you have not begun to set aside money yet, have no fear – it’s still possible to prepare yourself for a comfortable retirement if you’re diligent.
Do you have a retirement plan through your employer? Take advantage of employer-provided 401(k) or IRA match programs so you can make the most of your retirement savings. Some companies will match up to 6% of your retirement contributions, depending on the program. In addition to your employer’s program, you can open an IRA on your own.
It’s also important to know what your retirement goals are. Will you be spending your retirement relaxing on a waterfront property? Traveling the world? Are you aiming to retire a millionaire in 20 years? Or do you just want enough to live a similar life to what you have and watch your grandchildren grow up? No matter your goals, identifying them early on will help you reach them financially.
Focus on Your Emergency Fund
A sudden job loss or medical emergency can take a toll on your savings account. Make sure you’re prepared for the worst and financially stable enough to handle anything life may throw at you.An emergency fund is especially important in your 40s, when many of you are financially responsible for other people in your life like children or even your parents. If you are raising a family, be sure you have enough money saved to support your children as well. By creating an emergency fund, you can safely stow away savings for a potential emergency. We recommend creating a separate savings account that is solely dedicated to emergencies that is easily accessible. Avoid relying on stocks or bonds as a form of emergency money since it is not an immediate way of withdrawing funds if necessary.
According to Bankrate.com, nearly 59% of U.S. adults are uncomfortable with their level of emergency savings. Ideally, you should have around three to six months’ worth of living expenses tucked away in your emergency fund. That way your groceries, routine medical expenses and even your mortgage can still be maintained in the event of an emergency.
The average adult in Virginia, for example, spends over $2,100 a month on both essential and nonessential items. Therefore, in their 40’s they should have around $6,300 to $12,600 stowed away in an emergency fund.
Use Automatic Saving Apps
Take advantage of setting up recurring deposits to your Ameris Bank savings account. Automatic transfers like these can make it easier to save. Consider saving a healthy portion of your monthly paycheck to set yourself up for future success. A general rule of thumb is to set aside 20% of your income to your savings each month.
Be Smart About College Expenses
If your kids are headed to college, it’s important to find a balance between helping fund your child’s education and saving for retirement. Like retirement, the sooner you start saving for college, the better. Start a college fund as early as possible and calculate what you are able to afford and whether you might qualify for financial aid. It’s important to be realistic about the cost of tuition, so encourage your child to seek out scholarships or grants to help defray the cost.
Create an Estate Plan or Will
No one wants to think about what will happen to our families after we’re gone, but it’s important to have a plan in place. Proper documentation can ensure your family is taken care of. For this reason, it’s imperative to have an estate plan at hand, which identifies who will inherit your money and possessions after you pass away. A simple will can be drawn up online, but your trusted attorney can prepare one as well.Your estate is comprised of everything that you own, whether that is a car, home, checking and savings accounts and so on. Having an estate plan ready in case of an emergency is a great way to ensure your estate is delegated to those whom you’ve decided are fit to acquire.
You should also plan and create a living will as a part of your estate plan. A living will is an important legal document that includes your personal choices of end-of-life treatment when the time comes. Your living will is quite different than your last will, which explains how your want your assets handled after death, such as naming the legal guardians of your children.
It’s important to have your estate planning in order to ensure that your financial assets and property are well taken care off after you are gone, to set help set your family up for success.
Pay Off Any Outstanding Debt
Are your paying off monthly loans for your car or mortgage? Is student loan debt still looming over your head? The average student loan debt for Americans in their 40s is over $44,000. According to this study, the amount of your monthly debt payments should be no higher than 36% of your monthly income. Set aside monthly payments and work hard to minimize your debt so you can put as much as possible toward your retirement savings. Planning in your 40s is important to your financial future and the future of your family. At Ameris Bank, we can help guide you toward your goals. Contact us today or stop by one of our local branches in AL, FL, GA, MD, NC, SC, TN, or VA to get started.
Information presented in the Financial Advice website is provided for educational purposes only and is not related to Ameris Bank's actual products or services. Ameris Bank makes no representations as to the accuracy, completeness or specific suitability of any information presented. Information provided should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. Ameris Bank recommends you consult a professional for any specific guidance you are seeking.