Life Stage Series: Money Moves in Your 40s

We believe that financial planning is for everyone, no matter what age or stage of life. Money looks different at every stage of life. Our Life Stage Series breaks down what you need to know – from your 20s to your 60s – so you're always one step ahead.

Your 40s are often described as the "peak earning years" but they also come with peak responsibilities. From family to career, housing and debt, along with health and life admin – it’s a decade where financial clarity and discipline matter more than ever.

Here are some of the smartest moves you can make: 

Do a serious financial health check

By your 40s, you should have a clear picture of your net worth, your debts, your super balance and whether you're on track for retirement. If you haven't done this recently, now is the time. Many Australians in their 40s discover they're behind where they need to be. The good news is,  there's still time to fix it.

Supercharge your superannuation

No decade shapes your retirement more than your 40s. You still have 20+ years of compounding ahead of you, but the window is narrowing. Maximise salary sacrifice contributions where possible, and take advantage of the concessional contributions cap ($30,000 per year as of 2024). Even a few extra years of higher contributions can make a dramatic difference to your retirement balance.

Aim to be mortgage-free sooner

With higher income typically comes the opportunity to accelerate mortgage repayments. Use your offset account strategically, make extra repayments, and model out what paying an extra $200–$500 a month would do to your loan term. Getting rid of your mortgage before retirement should be a key goal.

Reassess your investment portfolio

Your risk tolerance and investment horizon are shifting. Review your asset allocation – both inside and outside super – and make sure it still aligns with your goals and timeline. Diversification across asset classes becomes increasingly important as you move closer to retirement.

Plan seriously for retirement

Retirement may feel distant, but your 40s are when the planning needs to become concrete. Think about what kind of retirement you want, what it will cost and what you need to save to get there.

Protect what you've built

By this life stage, you’re likely to have significant assets such as a home, super and investments. Make sure your insurance coverage reflects this. Review life insurance, income protection, and TPD cover, and ensure your will and estate planning documents are up to date, particularly if your circumstances have changed.

Address the "sandwich generation" pressure 

It’s time to start thinking about how you will support your kids and your ageing parents without losing your financial future. According to Australian Seniors’s Sandwich Generation Report 2025, on average, sandwich generation carers contribute nearly $1,500 every month to support their ageing parents or in-laws. In addition, over 4 in 5 (83%) of individuals with caring responsibilities for younger generations are still supporting them financially. Be clear about what you can and cannot afford to give, and remember that you cannot fund your retirement by neglecting it to support others.

Diversify your income 

If you haven't already built additional income streams, now is a great time to do so. Investment properties, share dividends, a side business or consulting work all reduce dependence on your primary job and accelerate wealth building.

Be strategic about your career

Your 40s can be a crossroads professionally. Some people hit their stride, others feel stagnant or burnt out. Whether it's pursuing a promotion, pivoting to a new field, starting a business or negotiating flexible arrangements – make deliberate career choices with your financial future in mind.

Tackle lifestyle creep head-on

Higher income in your 40s often brings higher spending. Bigger houses, private schools, luxury holidays and newer cars can quietly consume wealth that should be going toward retirement. Audit your spending regularly and make sure your lifestyle choices are conscious ones, not just defaults.

Get serious about tax planning

At higher income levels, tax planning becomes increasingly valuable. Strategies like salary sacrificing into super, negative gearing, franking credits and family trusts may be relevant depending on your situation. Minimise your tax burden and get in touch with an accountant or financial advisor. 

Don't neglect your health 

Just like the old saying goes, health is wealth. In fact, we believe that good health is one of your most important financial assets. Why? Poor health in your 50s and 60s can derail retirement plans, increase costs and reduce your earning capacity. Investing in your wellbeing now pays dividends later.

Your 40s are a powerful decade. You have the income, the experience and the time horizon to make genuinely transformative financial decisions. The key is not to let the busyness of this life stage cause you to put financial planning on the back burner.