It’s never too early to start planning for retirement, but realistically speaking, it’s not something everyone takes seriously in their 20s or even their 30s. But life starts changing by the time you’re 40. Hopefully, things are falling into place, whether that’s your career, starting a family, or anything else you’re striving for.

But most of all, you start thinking about the future more as you age.

It’s an excellent opportunity to reflect on your financial trajectory as you approach 40. According to the U.S. Bureau of Labor Statistics, the typical American worker enjoys their highest earning years from ages 45 to 54. That means you can formulate your retirement plan while your earning potential is still high enough to make it happen.

Here is how much you should have invested for retirement by age 40.

According to Fidelity, you should have three times your salary invested

The median U.S. salary for someone in this age group is about $63,000, meaning you should have between $126,000 and $189,000 invested for retirement. However, retirement planning is not an exact science. Everyone is different, and your lifestyle, location, income, and other factors can all affect how much money you’ll need later in life. Instead, focus on the ratio.

Did you think that number would be higher? When you’re 40, compounding still has time to work its magic. The average retirement age in America is 62, so that’s more than 20 years unless you retire earlier. Ideally, that will grow to eight times your salary by age 60, setting you up for a comfortable retirement.

Another thing I like about taking your financial pulse at 40 is that you probably have a good look at your financial situation. You likely have an idea of your career and income trajectory, and might be living a lifestyle you can use as a baseline for determining your eventual needs when you retire.

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Taking your financial pulse

Using three times your salary as a benchmark, determine whether you are ahead, behind, or right on target.

Pat yourself on the back if you’re on target. Enjoy the peace of mind knowing that compounding should take good care of you over the coming years. Those who invest far more than three times their salary by age 40 could achieve Financial Independence, Retire Early (FIRE), or even FATFIRE. The beauty of finance is that it’s ultimately a numbers game. Make the math work, and you can achieve any financial goal.

Just remember to try to enjoy life along the way. It’s important to avoid getting so caught up in saving and investing that you sacrifice your happiness. Don’t skimp on investing in spoiling yourself a bit here and there, especially if you’re already ahead of the game.

Make adjustments and ask for help when needed

Don’t panic if you’ve fallen short. At 40, there is plenty of time to catch up.

Start by evaluating your finances and checking your budget for opportunities to free up some extra income you can invest. Then, you’ll want to ensure you’re taking advantage of all the retirement tools available. If you’re contributing to your employer’s 401(k), see if an employer match is available. It’s free money that can boost your total retirement contributions. If you’re already using the match, check to see if you’re maxing it out.

Personal finance can be intimidating. If you feel lost at sea or unsure of yourself, you can consult a professional financial advisor to help you establish a plan. Again, many 40-somethings are at or entering their prime earning years in their careers, so it’s the perfect time to tackle this, rather than waiting till years later.

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