If You Make This Much Income Before 40, You're Ahead Of The Game

Workers across the country are experiencing financial hardships. Continued inflation, and a range of other economic factors, have made for difficult times. These personal hardships can add up to make consumers think that they have done it all wrong — especially when comparing themselves to the people they see online. The prevalence of financial celebrities, pundits, and influencers across social media can easily contribute to the notion that you've somehow fallen behind with your own financial situation. However, the reality is that this comparison game isn't particularly helpful, no matter what your financial standing looks like.

Moreover, if you are looking to compare yourself and your financial chops to others, looking at averages is a far more beneficial exercise. There will always be outliers, but if you can definitively say that you are at or above average when it comes to your personal finances, there is a good chance you'll be able to rest a little easier. For example, the average salary for a 40 year old is an easy piece of information to come by. According to SmartAsset, the average salary for those between the ages of 35 and 44 is $70,512 in 2025. However, as is usually the case when it comes to your finances, there's a lot more to this number than just your paycheck. If you aren't saving money, or you have extreme debt obligations, you might be making double that figure and still feel financial pressure.

People around the age of 40 generally find themselves in a kind of sweet spot in the workforce. College educated workers who might have continued on toward additional credentials beyond their bachelor's degree are generally done with their schooling by this point. It's also roughly 8 to 12 years after the average person gets married and has children (with women averaging a few years younger than men for both categories).

All of this taken together means that people entering their 40s often find themselves positioned in a job market that is prepared to reward them. Between educational attainment, over a decade of the experience in their chosen field, and many big life events already out of the way, those in their fourth decade have many reasons to work hard and experience expanded opportunities. Also, as companies increasingly fail to value employee loyalty, workers in their 40s might also find themselves jumping from job to job in search of higher salaries — a tactic that can be very successful.

Earnings isn't everything, however. The average salary for people in the 35-44 age group results in monthly gross paychecks of $5,876. However, everyone's finances are unique. A paycheck in the range of $5,000 per month after taxes can go a long way to funding numerous important lifestyle needs — but living paycheck to paycheck isn't likely something that most workers envision for themselves. This is where certain financial priorities should be baked into your monthly expenses, such as setting money aside in an emergency fund and saving for retirement.

By the time you hit 40, experts suggest that you should aim to have saved roughly three times your annual salary. With an average just north of $70,000, that means that your target at this decade turnover point stands at around $210,000. For those who may be a little behind, it's important to realize you still have time to make up the difference. Refocusing your priorities, and increasing your retirement contributions, can still yield great compounded interest results with nearly 30 years standing between your 40th birthday and your full retirement age. You can also focus on funding enhancements like 401(k) match programs at work which can help take some of the sting out of an increased contribution figure.

In addition to tracking your savings, it's also worth exploring the amount of debt you might carry. As you age, you'll want to spend more of your focus on reducing any ongoing debt repayments. Credit card bills, student loan payments, your mortgage, and even car loans all demand monthly contributions. The larger these debts are the less free cash you have available for other needs and desires in your life. When your debts are stacked up against your monthly income figure, your outgoing payment requirements can be expressed as a ratio. This debt-to-income (DTI) ratio is an important figure to keep in mind as you continue to progress through your financial journey.

Regardless of your age, a DTI of 35% is a good target to strive for — especially if you're struggling with monthly repayment requirements already. For an average 40 year old's salary, a DTI of 35% translates into roughly $2,057 per month. While limiting your outgoing payment obligations can be difficult, prioritizing increased repayments to lower your ongoing obligations can revamp your financial experience throughout life (it's also a good idea to focus big cash infusions on this goal, like bonus checks or your tax refund). As well, a DTI of 45% typically acts as a disqualifying figure for borrowers hoping to get a new mortgage loan. Many people will therefore want to tackle their debt burden as a practical matter — beyond the improvements in financial mobility that debt repayment can bring.