How much should you have saved for retirement by 40?

Saving for retirement usually happens over a lifetime. But at certain points along the way, it's important to assess where you are and ensure you're on the right path.

Though there are no exact rules for how much you've saved for retirement by a specific age, every decade can represent a milestone in your retirement journey. It's often helpful to look back at how far you've come and what you can do next to achieve your retirement goals. If you're wondering how much should you have saved for retirement by 40, here are some important things to consider.

There are no specific guidelines or benchmarks for retirement savings by 40, but the general rule of thumb is that most people should have about three times their salary by then. If you make the U.S. average annual salary of about $53,000 a year, that means you're well on track if you have $159,000 put aside at this age.

However, most people don't have this amount saved. A 2021 study by the Federal Reserve found 71% of Americans ages 30 to 44 had at least some retirement savings, but only 34% said their retirement savings were on track. Among 45- to 59-year-olds, 83% had retirement savings, but only 40% said their retirement savings were on track.

These figures aren't surprising considering all the financial obligations that can hit people in their 40s, whether it's a mortgage, car loan or credit card debt. People in this age group may also be part of the "sandwich generation", with kids at home as well as aging parents—and a lot of competing financial priorities. On top of this, everyone has daily expenses, like car payments, gas, utilities and groceries. These immediate needs make it more difficult to save for the long term.

However, if you aren't where you'd like to be, you can do several things to build your retirement savings and reach your financial goals:

Some employers will match your retirement contributions up to a certain percentage of your salary. Say your employer offers a 4% match. If you make $65,000 a year and are contributing at least 4% of your salary to the fund on your own, that's an extra $2,600 in your retirement account.

If you're not maximizing your retirement contributions up to the employer match, consider taking advantage of this benefit. Most employer retirement plan administrators have a progress checker alongside your account balance. Check this regularly, and if you can, increase your contribution by 1 or 2% periodically. Focusing on this task alone could significantly boost your retirement savings.

Consider opening a traditional or Roth IRA to supplement your employer's retirement plan. With a traditional IRA, you can save up to $6,000 this year (or $7,000, if you're age 50 or older). You can invest after tax dollars in a traditional IRA and may receive a tax deduction on these contributions, depending on your income.¹ With a Roth IRA, you can invest after-tax dollars, benefit from tax-free growth and withdraw your contributions and earnings tax-free once you reach age 59½.²

Just keep in mind that the $6,000 to $7,000 contribution limit is the total you can contribute across all your IRA accounts. However, it's a smart strategy to have a mix of accounts taxed at different times depending on whether you want to minimize your tax bill now or when you enter retirement.

A competitive job market comes with several advantages for workers, one of which is the potential to significantly increase your wages. People who have switched jobs in the last year have increased their wages by 8%, according to recent findings by ADP Research Institute.

However, you don't have to quit your job and find another to increase your pay. Many companies are determined to boost employee retention by offering retention bonuses and wage increases to keep good workers.

Now may be a good time to renegotiate your pay if you're happy with your current employer—or seek other job opportunities if you're looking for a better work environment and want to grow your skills.

People often spend money on things they don't need, no longer use or don't even realize they're still paying for. These items can include things like subscriptions, gym memberships or other services that automatically renew. Establishing a budget can bring clarity to your overall spending habits.

Take the time to look at your credit card and bank statements to see if any purchases on your account fit this description. Many banks make this easy with online features where you can filter transactions for recurring charges. Once you go through your purchases, identify anything you can cancel or downgrade. You also can look at your current spending and find ways to cut back on new items or indulgences that aren't crucial. Even small changes in your spending habits can lead to big savings over time that you can then invest in your retirement.

According to the freelance marketplace Upwork, more than 59 million Americans freelance either full- or part-time — that's about 35% of the U.S. workforce.

Upwork's study indicates many freelancers are providing skilled services such as business consulting, design, computer programming or marketing. Consider leveraging your skills to create additional income outside of your workday. You may be good at video editing, photography, woodworking, floral design or another creative hobby that you can turn into something more. Many people are willing to pay other professionals to do tasks they either don't have the skill or time to do.

Everyone's retirement savings needs are different. The recommended amount to save will vary depending on your expenses, where you plan to live and the retirement lifestyle you want to lead. An arbitrary number devised by industry experts doesn't capture these nuances. Consider working with a financial advisor who can help you determine your personal retirement goals.

If you already have an IRA or 401(k), a financial advisor also can help you better understand and manage your entire retirement portfolio. They can assess your risk tolerance and whether you're being overly conservative or aggressive with your investments. They also can review your employer-sponsored plan and IRA on a regular basis to see if what you're invested in still aligns with your retirement goals and whether you need to make adjustments.

It's never too late to save for retirement or to adjust your strategy. If you're in your 40s, use this time to assess where you currently are with your retirement savings and if you're on track to meet your goals. If you need to get back on track, consider seeking help from a financial advisor. A few key steps could put you on the path to enjoying a comfortable retirement.