Jul 31, 2025
If you’re like many hardworking Americans, you’ve spent years faithfully contributing a portion of your paycheck to a 401(k), watching your retirement savings gradually grow. By the time you hit your 40s, it might feel like you’re on track to retire at a reasonable age.
But do you really have enough?
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Since you and your spouse have only saved around $50,000, it sounds like you’ll got a late start in investing after settling into your careers. You know you’re probably behind — and maxing out your contributions feels like the obvious next step.
Is there anything else you can do to supercharge your retirement savings?
Let’s take a look at where your retirement savings should ideally be right now — and if you’re not quite there yet, how to catch up fast.
How much should we have saved now?
According to Equifax, by the time you reach your 40s, you should have around 3 times your annual salary saved in your 401(k). That’s not the reality for many American workers. The median balance for participants ages 45 to 54 in Vanguard’s defined contribution plans was $67,796 in 2024.
Your 40s should be the years where retirement planning becomes a top financial priority — having six times your salary saved by age 50 is a common benchmark — but the idea of that can be anxiety-inducing if you already feel behind and have debt and other expenses to worry about.
The expenses of growing older — supporting children, paying medical bills, home maintenance and debt payments — may make you feel like there’s no chance to increase those retirement contributions and to make that 401(k) creep up any faster.
As a good rule of thumb, try to pay down any immediate debts and set aside an emergency fund worth three to six months of expenses for any emergency bills. Paying your debts can free up funds for retirement, and setting aside money for surprise costs can keep you from having to cut back on account contributions.
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Maxed out your 401(k)? Now what?
Luckily you don’t have to rely on just your 401(k) to set yourself up for retirement.
In addition to your 401(k), consider opening a traditional IRA or Roth IRA.
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Deciding which is right for you will depend on what you think your tax rate will be in retirement and your eligibility. Both have a maximum contribution limit of $7,000 for 2025 if you are under age 50.
With a Roth IRA your contributions are after-tax and your funds grow tax-free. This type of account has more lenient withdrawal rules and there are no required minimum distributions (RMDs). You won’t owe any taxes or penalties when you withdraw your contributions. To withdraw your earnings tax-free, you need to be at least age 59 ½ and have had the account open for at least five years.
Additionally, consider opening a high-yield savings account to start stashing more cash away. Many HYSAs offer percentage yields of 4% or more, meaning that your funds could benefit from some strong compound interest. These funds can be more accessible than other investment vehicles, so make sure that you keep it dedicated for additional retirement savings to avoid dipping into it unless necessary.
Fidelity says you can also consider putting retirement savings in health savings accounts (HSAs), tax-deferred annuities and a brokerage account with tax-efficient strategies.
Should we max out our 401(k)?
Contributing enough to your 401(k) to get the full employer match, if your employer offers one, should be the bare minimum to avoid leaving free money on the table. But maxing out your contributions might be the next step to catching up your retirement.
Be sure to stay aware of current contribution limits: For 2025, employees can contribute up to $23,500 a year until age 50, when you can start making catch-up contributions.
Also be sure to note taxes involved with 401(k) contributions: You contribute your dollars pre-tax, but that income will be taxable when you withdraw in retirement. If you suspect you will retire in a lower tax-bracket, maxing out a 401(k) might be the preferred option. But if you think you’ll retire in a higher bracket, maxing out a Roth IRA and taking advantage of tax-free withdrawals might be the better move.
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Chris Clark is a Kansas City–based freelance contributor for Moneywise, where he writes about the real financial choices facing everyday Americans—from saving for retirement to navigating housing and debt.
