Financial Planning For Your Forties

As we reach our 40s, we face significant financial changes. It’s a time when we earn the most, but also when we encounter more financial demands from our families. Here are some tips to help you navigate this crucial time.

Beginning of Peak Earnings

Your 40s often mark the beginning of your peak earnings years. With experience and expertise under your belt, you are earning more than ever before. While this is an exciting time, it is crucial to avoid what is known as “lifestyle creep.”

Lifestyle creep refers to the gradual increase in your spending as your income rises. While it is tempting to indulge in luxuries, it is essential to strike a balance between enjoying your hard-earned money and saving for the future.

It is also important to remember to think carefully when considering “big-ticket” items.  While many people tend to focus on reducing the small wasteful expenditures, it is often the big-ticket items that can stand in the way of building wealth in your 40s. Whether it is upgrading your home, purchasing a new car, or planning a dream vacation, big-ticket items can have a significant impact on your financial health. Before making these purchases, carefully evaluate your budget and financial priorities to ensure they align with your long-term goals.

Ramp Up Retirement Savings

As you approach retirement, it is key to ramp up your retirement savings to help secure a comfortable future.  

It is crucial to take advantage of employer-sponsored retirement plans, such as 401(k) or IRA accounts, and especially employer matching contributions. Additionally, consider increasing your contributions to maximize savings potential and avoid the temptation of lifestyle creep.

Your 40s are a critical time to prioritize retirement savings and benefit from the power of compounding returns for the remainder of your working years.

Plan for Family Financial Challenges 

Your 40s can be a time of significant family financial changes. Whether you are supporting children through college or caring for aging parents, these responsibilities can impact your financial situation. It is essential to plan and budget for these changes to help prepare for both expected and unexpected expenses. 

Be willing to engage parents and children in open and honest discussions about finances. Whether it is planning for end-of-life care for parents, or teaching children about money management, these conversations can help foster a better understanding of financial responsibilities and expectations for the future.


Navigating your 40s is a pivotal time in your financial journey, filled with both opportunities and challenges.  With careful planning and smart financial decisions, you can navigate this important decade with confidence.




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certified financial planner Marshall Clay wears a gray jacket and white shirt while posing for professional photo in office

Marshall Clay CFP, J.D., is a Partner and Senior Advisor at The Welch Group, LLC, specializing in providing Fee-Only investment management and financial advice to families throughout the United States. Marshall is a graduate of the United States Military Academy in West Point, New York, the Cumberland School of Law in Birmingham, Alabama, and is a CERTIFIED FINANCIAL PLANNER™.  In addition, Marshall is a frequent guest on local television stations as an expert on various financial planning matters.



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