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Retirement Checklist for Your 40s

At this stage of your life, your earning power is likely to keep increasing. As you look ahead to anticipated expenses in the coming years, saving for retirement may become a bit of a balancing act between your long-term financial goals and your short-term needs. Here are some ideas to consider.

1. Refine and expand your plan

  • Review your retirement plan

    • Make sure you are saving enough to retire when you want to.
    • Confirm that your investment and asset allocation strategy is aligned with your goals.
  • Protect yourself and your loved ones

    • Check that the beneficiaries on your retirement accounts are up-to-date.
    • Make sure you create and update your will, general durable power of attorney, medical power of attorney, and living will.
    • Determine if you have the appropriate levels of life, homeowner’s, and other insurance to protect your family from the unexpected.
  • If changing jobs, manage your employer-sponsored retirement plan

    • Be aware that taking cash out of your 401(k) can carry not only high taxes, but also early withdrawal penalties, and can set you back on your retirement plan.
    • Explore options for your old 401(k), such as rolling over to an IRA.
      Please keep in mind that rolling over assets to an IRA is just one of multiple options for your retirement plan. Each of the following options are different and may have distinct has advantages and disadvantages.
      1. Roll assets to an IRA
      2. Leave assets in your former employer's plan, if plan allows
      3. Move assets to your new/existing employer's plan, if plan allows
      4. Cash out or take a lump sum distribution

2. Prioritize saving for retirement

  • 401(k)s and IRAs: Take full advantage of these tax advantaged choices

    • If you have access to an employer plan, try to contribute at least as much as your employer will match. Even better, contribute the maximum allowable amount.
    • Consider contributing the maximum allowed to your IRA every year, particularly if you don’t have an employer plan. Learn more about IRAs.
    • Look into spousal IRAs as a way to increase tax-advantaged savings.
    • Find out whether converting a Traditional IRA to a Roth IRA would benefit you.
  • Find out if you are saving enough with My Retirement Plan®, our easy-to-use online savings calculator.

  • Consider putting part or all of any bonuses, tax refunds, or other lump sum payments into your retirement savings

  • Don’t assume that IRA or 401(k) contributions are enough

    • Depending on your retirement goals, you might need to be saving more than 15% to 20% of your income while in your 40s.
    • IRA contribution limits could mean you need to save extra in taxable accounts like a brokerage account.

3. Protect your retirement savings from short-term needs

  • Strengthen your emergency fund

    • Consider increasing your emergency fund to six months' income.
    • Don’t worry about funding it all at once; set a goal for yourself and work toward it over time with My Savings Plan®.
  • Tackle high-interest debt

    • Lower your monthly interest payments with Wells Fargo's Debt Pay Down Solution®, a simple way to pay down debt faster.
    • As you pay off debt, direct the money you save into emergency or retirement savings.

We are here to help you take the steps that are right for you. To get started, contact a Wells Fargo Retirement Professional today, and watch our video: "Jumpstarting My Financial Savings."

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