Eight Dave Ramsey Tips for Getting Retirement Back on Track in Your 40s

Workers who reach their 40s usually realize retirement can no longer be pushed aside. What once felt far away is now getting closer year by year.

For many people, that decade arrives with only a small amount saved. Even so, financial expert Dave Ramsey says it is still possible to make up ground. He recommends eight practical steps for boosting retirement savings in your 40s and beyond.

Boost your earnings

Being in your 40s can make it feel as if your career window is narrowing, but Ramsey says most workers still have plenty of time left. If your retirement savings are lagging, he believes increasing your income may be necessary.

That could mean landing a new job or moving into a more profitable field. It may also mean keeping your current role and adding another source of income, such as a part-time job or side hustle.

Pay off debt

It is hard to build wealth when debt is draining your money. Once you remove that burden, you can put more toward savings and strengthen your financial footing.

Ramsey strongly supports the debt snowball approach. Under that method, you focus on paying off your smallest balance first, even if it carries the lowest interest rate.

While that strategy may not save as much in interest as targeting larger, higher-rate debts first, Ramsey says wiping out one balance at a time creates momentum and helps people stay motivated.

Contribute as much as possible to retirement accounts

Retirement accounts offer major advantages, including tax-deferred growth in many cases. Ramsey encourages people to contribute the maximum whenever they can.

With Roth IRAs and Roth 401(k)s, you pay taxes on the money in the year you contribute, and then withdrawals are tax-free later. Many employers also match part of what workers put into 401(k) plans and similar accounts, which can speed up savings growth.

Find additional ways to cut spending

Raising income can be difficult, so trimming expenses is often the easier route.

Ramsey suggests reviewing subscriptions such as magazines and streaming services and dropping the ones you no longer use. If you rarely go to the gym, cancel that membership.

He also recommends looking for other savings opportunities, such as shopping for cheaper car insurance or eating out less often. The money you save can then be redirected into retirement accounts.

Build wealth through your home

Ramsey is a strong supporter of paying off a mortgage ahead of schedule. Once the home loan is gone, more money becomes available for investing elsewhere.

For someone who clears the mortgage during their 40s, the 50s could become a period for sharply increasing retirement contributions.

That could leave you in a far stronger financial position by the time you step away from work in your 60s.

Stay in the workforce a little longer

If you are far behind on retirement savings and also supporting children, including future college costs, you may need to consider working longer before retiring.

In that situation, Ramsey says it makes sense to keep saving aggressively through your 40s and 50s. If the numbers still do not add up, he advises accepting the possibility of a few extra working years to give your nest egg more time to grow.

Get help from an investing professional

If your low savings level has you worried, Ramsey says it may be time to speak with a professional.

A financial advisor can review your situation and help you create a clear plan for reaching your retirement goals. That kind of guidance can remove some of the uncertainty and keep you focused on the real numbers.

You may be skilled in many areas, but personal finance may not be one of them. In that case, professional advice can be especially valuable.

Keep believing it is not too late

Ramsey believes it is never too late to improve your financial life, regardless of age. As Ramsey Solutions puts it, you cannot change the past, but you can still change your future.

So do not lose hope. No matter how much you have saved so far, there is still time to strengthen your finances before retirement.

The takeaway

Dave Ramsey has long argued that people should take control of both their present finances and their future security. If you are in your 40s, now is a good time to see how your retirement savings compare with where you want them to be.

If you are behind, following some or all of Ramsey’s suggestions could help you close the gap faster.

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