I Started My First Retirement Account at 40 and I'm Here to Tell You It's Never Too Late

Investing for retirement is one of those things that's best done as early as possible. Ideally when you start your career and are still in your 20s. But there are many reasons why that might not work out.

I'm a brand-new retirement investor, having opened my first-ever retirement account just a few months ago at age 40. Here's how I arrived at this place -- and what I intend to do now that I'm here.

A late start to saving for retirement

How did I come to be a middle-aged first-time retirement investor? There are a combination of factors. But the throughlines were living paycheck to paycheck on low salaries in my last career, along with needing to pay off student loans.

I also didn't know anything about investing. I grew up in a household with multiple small businesses and an often shaky financial situation, rather than with parents with office jobs who contributed diligently to employer-provided retirement accounts.

When I changed careers from nonprofit museum operations and management in 2021 to digital content creation, I also started freelancing. I later ditched W-2 employment to become a full-time freelancer. I also focused on paying off high-interest debt and saving money to buy a house (a goal I prioritized, with the aim of improving my current living situation).

Finally, a few months ago, I got my long-anticipated mortgage and new home. That meant I had the solid financial foundation I needed to start investing. I decided to open a traditional IRA with a financial institution where I already have a checking and high-yield savings account. I opted for a robo-advisor account to make the process as painless as possible.

Will investing still pay off at this point?

I will need to invest noticeably more money to achieve my goals than I would have had I started earlier. Even so, it's still worth investing now. Compound interest will still work to my benefit, even over a shorter period of time.

Let's say I wanted to have $500,000 in my IRA by the time I reached age 65. Here's a look at how much I'll need to contribute every month to make that a reality, now at age 40 vs. starting when I was 25. This is based on an initial contribution of $1,000 and a fairly conservative 8% return:

With this target in mind, I've set up automatic contributions of $125 a week to my IRA. This doesn't quite get me to my annual contribution limit of $7,000, but it's close enough that I'll be able to make up the difference by contributing extra money a few times a year. And when I turn 50, I'll be able to add even more to the account in the form of a catch-up contribution (currently $1,000, but I expect IRS limits to change over the next decade).

Three steps to start building a nest egg today

Are you like me, seeing more wrinkles and the occasional gray hair in the mirror and wondering if it's too late to invest for retirement? Good news -- it's not. Here's how to get started.

1. Choose a stock broker

Good news on this front -- we've done the hard work for you. Click here for a list of expert-reviewed stock brokers. Many of them offer tax-advantaged retirement accounts along with taxable options.

You can also check out our favorite brokers for IRAs specifically. And if your employer offers a 401(k), it's worth considering, especially if a portion of your contributions will be matched as that's free money.

2. Consider a robo-advisor

I have many skills, but I have a decided lack of experience choosing investments (and not a whole lot of time and energy to spend learning how). So I opted for an IRA with a broker that offers robo-advisory services. It's cheaper than using a human advisor, and it was very easy to set up. Check out our picks for the best robo-advisors for beginners.

I filled out a questionnaire to determine my risk tolerance and goals for investing and opened the account with $1,000. The contributions I make every week are invested for me automatically in a diversified mix of ETFs and bonds -- no muss, no fuss.

3. Set up automatic contributions

I'm the first to admit that I'm generally not a fan of auto-paying bills and automatic savings account transfers. But investing is different. I don't want to risk forgetting to make these all-important transfers for my future financial security. My automatic contributions are weekly and reasonably small enough that I'm not worried about overdrafting my checking account.

Slow and steady wins the race

I do feel a pang of regret when I look at the math and see that I could've reached a sizable nest egg by age 65 with a lot less money had I started 15 years ago. But I can't go back in time -- gotta keep moving forward. I'm happy that I managed to find my way to investing for retirement eventually.