It’s all too easy to cruise past middle age without too much of a retirement fund. Indeed, some major, expensive financial priorities tend to arise in one’s 30s and early 40s, making it challenging to save extra cash on one’s longer-term retirement goals. Heck, some folks in their 40s may not have even thought all too much about retiring, let alone building up a nest egg for themselves.

Either way, it’s never too late to get started saving and investing. And as someone in your 40s, you’re still young enough to unlock the power to be had from compound returns. Also, it’s not too hard to imagine that many 40-something Americans are just getting started to build wealth after spending most of their earlier years chipping away at student loan debts.

Further, some Americans may just be starting their new careers in their 40s after having enough time to recognize what they’re truly passionate about. In many ways, 40 can be the new 20.

Key Points About This Article

• If you’re running behind your retirement goals, it’s time to start getting serious about catching up.
• Getting a budget, a financial adviser, and an investment plan can help you get back on track.
• Also: Are You On Track to Retire? Take This Quiz and Find Out ^(Sponsored)

Here’s where you should be with your nest egg in your 40s, at least according to JP Morgan

According to a recent JP Morgan (NYSE:JPM) research report, you should have 2-3 times your annual salary banked for retirement to be on track. And by 45, the target raises up a notch to 3-4 times. Indeed, if you’ve got a modest $50,000 annual income and not a whole lot saved up, it can feel rather discouraging to learn you need $100,000-150,000 to be on track.

If you’re 40-something and have only recently started to give some thought to your retirement goals, don’t be too discouraged if you learn your nest egg is markedly smaller than the average.

The good news is that it’s far easier to catch up financially if you start in your 40s than in your 50s or 60s. And if you can formulate a retirement plan sometime soon, I do believe it’s possible to catch up on retirement savings, even as the bar (or checkpoints) continues to be raised higher over time. For instance, by 50, you should have 3.5-6 times your annual income.

Of course, meeting with a financial adviser could bring ample value to the table, especially if there are quick and easy actions you can take to eliminate expenses and increase how much you save and invest.

In any case, let’s get into some quick catch-up tips you may wish to put to work if you’re ready to make up for lost time regarding retirement savings.

Revisiting the budget to grasp one’s spending and saving habits

If your nest egg isn’t as fat as it should be in your 40s, it may be worthwhile to trim away some of the monthly expenses you don’t enjoy. Indeed, cutting out the daily cappuccinos and croissants probably won’t make a massive difference in the near- to medium-term. However, you may have a ton of convenience costs that don’t bring you the enjoyment that can be most easily cut. Indeed, how many folks realize they’ve been paying for a subscription they seldom use?

By just getting a budget into place, you may find it’s easier to take your savings into overdrive as you pare the “automatic” expenses you didn’t know were there. Indeed, personal budgets can be powerful for those who don’t really know where their money is going.

Have a solid investment plan.

If you’re a passive investor, you may just be paying too much in fees (think expense ratios) for the inventory products you own. Indeed, the 2% fee slapped on mutual funds doesn’t seem like a whole lot. However, they can eat away at your nest egg without adding all too much value to the table. Indeed, many high-fee funds simply do not earn higher returns. Given this, it makes more sense to consider minimizing fees (or expense ratio for funds) on passive investment products you own.

Maybe that entails ditching an active mutual fund from your bank in favor of a vanilla S&P 500 index fund with an expense ratio below 0.1%. And perhaps that entails constructing a portfolio of stocks of great companies you’d be willing to own for the long haul.

Either way, you’d be surprised how much of a difference fee minimization can make, especially if you’re a passive investor who may unknowingly pay too much for too little. As always, seek the services of a financial adviser if you’re serious about making up for lost time so that you can hit or exceed the retirement milestones by your 50s.

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