Your 40s are a pivotal decade—your career is likely in full swing, your income may be higher than ever, and you’re juggling priorities like mortgage repayments, kids’ education, and lifestyle goals. With the right approach, this can be a powerful time to grow your wealth and set yourself up for a more secure future.
Here are five smart financial moves Australians in their 40s can make to build wealth and avoid common pitfalls:
1. Maximise Your Super Contributions
Retirement may still feel distant, but your 40s offer a valuable opportunity to boost your superannuation while compounding has time to work in your favour.
For example, if Jo starts contributing an extra $5,000 per year to her super from age 40 and it earns 7% annually (after fees and tax), she could have $69,000 more by age 50, and $316,000 more by age 65 than if she made no extra contributions.
Take advantage of:
- Salary sacrifice arrangements
- Personal deductible contributions using carry-forward rules
- Government co-contributions (if eligible)
- Spouse contributions to boost household super balances
Also, note that the super guarantee rate is currently 11.5% and will increase to 12% on 1 July 2025—a timely reminder to review your current contributions.
2. Buy a Home That Supports Your Lifestyle and Long-Term Goals
It’s tempting to stretch your budget for the dream home in the dream location, but this can leave you financially vulnerable. A larger mortgage often means higher stress, less cash flow flexibility, and the risk of carrying debt into retirement.
Instead, consider a home that fits your lifestyle without compromising your financial future. Choosing a property that allows you to save, invest, or take family holidays can create a more balanced—and enjoyable—life now and later.
3. Drive Your Wealth, Not Just Your Car
Car loans are one of the most common ways people reduce their ability to build wealth. Flashy cars come with hefty price tags, ongoing costs, and rapid depreciation.
A popular piece of financial wisdom: “Drive the cheapest car your ego will allow.” The money saved by buying a reliable used car instead of financing a new one can be redirected to investments, super, or paying down debt—ultimately compounding into a significant wealth advantage.
4. Get the Right Insurance Coverage
Insurance might not be the most exciting financial topic, but it’s essential for protecting your wealth and your loved ones. Many Australians are underinsured when it comes to life, disability, income protection, and even basic home and contents cover.
Review your coverage to make sure it matches your current circumstances. Also, watch out for “junk insurance”—such as limited accident-only cover—which often sounds like a bargain but offers little real protection.
Seek advice from a financial adviser to ensure your policies offer the protection you actually need.
5. Plan for the Unexpected
You may feel invincible in your 40s, but planning for unforeseen events is a wise financial move. Do you have an up-to-date Will and Power of Attorney? These documents are essential, especially if you have dependants or shared assets.
Review your estate planning documents regularly and ensure your superannuation nominations are current and legally binding. Being prepared means peace of mind for you—and clarity for your loved ones.
Final Thoughts
Your 40s can be your most powerful decade for financial progress, provided you make informed, deliberate decisions. From superannuation strategies to lifestyle choices, each move can have a meaningful impact on your long-term financial wellbeing.
If you’d like to make the most of this stage in life, talk to our advisory director to help tailor strategies to your goals and circumstances.
