Think It's Too Late to Start Investing in Your 40s? Here's Why You Still Have Time to Build Wealth

Key Points

• Starting late isn't great, but it doesn't mean you're doomed.

• Try to save aggressively and invest effectively from now on.

• You may want to consider delaying your retirement a bit, too.

• The $23,760 Social Security bonus most retirees completely overlook ›

Are you in your 40s and worried that you blew it and are too late to achieve a comfortable retirement? Think again. Even those who start late may be able to amass a sizable nest egg.

Here's what you might do to strengthen your financial condition if you're starting in your 40s, or even at some younger or older age. The table below shows what's possible -- how your nest egg might grow, at an annual average rate of 8%. (I used 8% to be a bit conservative, since the stock market has averaged annual returns of close to 10% over many decades, and in the coming decades, the market may well grow at a slower (or faster!) rate.)

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Source: Calculations by author.

If you're 45 now and are able to work until age 75, that's 30 years of saving, investing, and growth ahead of you. Even if you retire at 65, you have 20 years. Remember that your earliest invested dollars are your most powerful ones, as they have the most time in which to grow -- so save and invest aggressively.

You might not want to choose risky, aggressive investments, though. Instead, you can do quite well sticking with a simple, low-fee index fund such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). There are other powerful index funds to consider, as well.

Image source: Getty Images.

Consider taking on a side gig for a few or many years, as that can help you sock away more money. And know that while delaying your retirement may not be a welcome thought, it's a powerful move. It can help you save on health insurance costs, get bigger Social Security checks, and end up with a bigger retirement fund.

The $23,760 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.