Those in their 40s find themselves at an interesting juncture: Many have worked for about 20 years, and plan to retire in the next 20 years. Suddenly, retirement doesn’t feel that far off, and many investors start considering their retirement savings.

How much to save for retirement in your 40s? John DeYonker, Titan’s head of investor relations, recommends a 40-year-old should have three times their salary saved. Plenty of investors fall short of that goal, however, so investing in your 40s may require intentional planning.

1. Do you have a handle on your budget and debt?

When planning for retirement, investors must consider their overall financial picture. For one, a retirement budget is informed by the pre-retirement standard of living; experts say most people need about 80% on average of pre-retirement income, though this amount may be adjusted if investors live above or below their means. For example, an individual who earned $150,000 per year before retirement would need $120,000 per year in retirement.

For investors in their 40s, many experts say retirement savings should be the first priority after paying for essentials like housing, transportation, and food. A forty-something may consider evaluating their monthly budget to determine how much they can afford to divert to their employee-sponsored retirement account, like a 401(k)—with the goal of saving up to the contribution limit each year. A careful budgeting exercise can reveal how much is being spent on activities like entertainment and dining out, which can be scaled back in order to maximize contributions to retirement accounts. 

Another factor that may take a chunk out of the budget is debt, whether school, auto, credit card, or other loans that incur interest costs. Getting rid of those recurring debt repayments—and their toxic interest rates—can free up money in the long run to put toward retirement savings.

2. Are your retirement accounts organized?

Today’s employees tend not to be “lifers” at a single company; instead, they often gain raises and higher titles by changing employers. “In fact, 15 million people who have 401(k)s through a job change positions each year,” notes DeYonker. A 401(k) is a retirement savings account sponsored by many employers that offers investment options including mutual funds, exchange-traded funds, stocks, and bonds.

As investors advance in their careers, these 401(k) accounts with former employers may not be optimized, or they may be forgotten about entirely. “It’s important for investors to consider reviewing, organizing, and consolidating their retirement accounts to know exactly where they stand with their savings,” suggests DeYonker.

“[When you take] a new job, you're moving forward in your life,” he says. “And now all of a sudden you're going to leave your old retirement account behind? That doesn't sound right.” DeYonker adds, “We hear from a lot of clients, ‘It just makes my life so much easier to be able to log in one single place and know where my retirement assets are.’"

When someone leaves an employer, DeYonker continues, “That 401(k) can really go three different places: It can stay with their current provider, it can go to their new employer's 401(k) or similar retirement plan, or it can go to an IRA,” another type of tax-deferred account. (Note: If moving funds from one 401(k) to another, the transfer must happen as a rollover to avoid triggering penalties for early withdrawal.)

Investors can also roll 401(k)s from previous employers into a traditional IRA without penalty. A traditional IRA is tax-deferred, meaning contributions are made pretax and some investors can reduce their taxable income by fully or partially deducting the amount invested that year.

No matter which option investors choose, it’s paramount to know where all retirement funds are and how they’re invested.

3. Can you invest more?

Once investors understand their budgets and current retirement savings, they can better decide how to maximize their investments. Some investors may opt to put more money each month toward their employer’s 401(k). Some employers match employees’ contributions up to a certain percentage, which is effectively free money. Whether or not a match is available, increasing contributions is a way for investors to catch up on or accelerate their existing funds, taking as much advantage as possible of the time horizon for compounding interest—earning interest on interest over time.

Some may also choose to invest additional money in the stock market via a brokerage account. While results of any investment are never guaranteed, investing in stocks may help investors generate passive income and stay ahead of inflation. The average stock market return was 13.9% annually during the last 10 years, while annual inflation rates were between 1% and 3%. Investors may open their own accounts and choose their own investments, or outsource that decision-making to an investment team or robo-advisor. 

4. When do you want to retire?

Zeroing in on the desired retirement age helps investors make decisions based on their time horizon. They can ask themselves, How much will I have saved by that age, and how long will those savings last? 

This decision also affects things like Social Security payments. Investors can start claiming Social Security benefits as early as age 62, though their benefits are reduced for claiming before full retirement age (67 for those born in 1960 and later). By contrast, claiming benefits past full retirement age earns “delayed retirement credits” that rake in an additional 8% annually. Though experts say investors in their 40s shouldn’t assume Social Security benefits will comprise most of their retirement income, it’s helpful information for the big picture.

Additionally, investors can consider working a bit in retirement—perhaps as a landlord if they buy an investment property or as a consultant in their previous industry. All of these considerations are key for workers to understand if they’re saving “enough” for their planned retirement age and lifestyle.

The bottom line

Many workers in their 40s are halfway to retirement, and whether they’re just starting to save or looking to accelerate growth of their funds, retirement is probably in focus. Investors in their 40s have time to maximize their savings and to do so, they can first assess their budgets and consolidate their investment accounts. 

From there, they can look to increase contributions to retirement, brokerage, and other accounts to try to grow their funds. To understand whether their savings are on track, workers can determine when they want to retire and what they want their retirement to look like.