I'm 40 and Just Opened an IRA. Is My Retirement Doomed?

I spent the last few years of my life (and my late 30s) whipping my personal finances into shape. I paid off a solid chunk of debt, saved an even bigger chunk of money, and became a homeowner a few months ago. Now I've officially opened my first-ever retirement account.

I spent more than a decade in a low-paying nonprofit career, and most of my jobs in that field didn't offer access to an employer-sponsored retirement account -- let alone matched contributions. And even if those employers had, I didn't have the room in my budget to contribute anyway. Consequently, at age 40, I now have a brand-new individual retirement account (IRA).

To save enough money for retirement, it's better to start much earlier -- ideally in your 20s, when you're working your first "real" job. I missed the boat on that, obviously. Here's why my retirement isn't doomed -- and why I'm approaching this new stage of my life with a fair amount of optimism.

Despite what pop culture tells us, 40 isn't old

I've heard the jokes, and even made some at my own expense. But honestly, 40 isn't old. It's just middle-aged -- according to the CDC, the average life expectancy for an American woman is 80.2 years. Consequently, I likely have a few decades left to invest and watch my money grow thanks to compound interest.

Let's say that I'm able to reach the $7,000 annual contribution limit for my IRA every year for the next 10 years, and I earn an 8% annual return on my investments. (The stock market has returned an average of 10% per year for the last five decades, but let's be a bit more conservative.) In 10 years, I can expect to have more than $101,000.

Starting at age 50, the contribution limit rises to $8,000 per year. Assuming these limits stay the same, if I start with the money I grew from age 40 to 50 and increase my contributions to meet my new limit for the next 20 years, I could end up with more than $838,000 by age 70. Not bad -- even for starting so late.

I'll be able to consistently contribute to the account

I may have waited until now to open an IRA, but I've reached the point in my life where I feel confident that I'll be able to regularly contribute money to it, and likely reach my annual contribution limit. If I had started earlier, I would have struggled to consistently carve money out of my budget to invest.

Right now, I'm approaching contributions with a set dollar figure every week. And since I'm self-employed with variable income, I also have the flexibility to contribute more if I can (and less -- but my weekly amount is small enough that I hope to always be able to make it). I started the account halfway through the year, but it's still my hope to fund it with the full $7,000 I'm allowed for 2024.

I'm using a robo-advisor

I'm less concerned about my shortened retirement savings window because my IRA uses a robo-advisor and I'm not picking investments myself. Sure, I could keep investing simple and choose target-date funds and exchange-traded funds (ETFs) that invest in the broad stock market. But even picking those kinds of investments myself makes me feel a bit out of my depth.

When I opened my IRA, I filled out a questionnaire that asked me about my age and my risk tolerance. Based on that information, the robo-advisor is investing my money automatically in a way that will give me optimum growth with minimal risk. I feel good about that. I send money to the account every week, and I can rest easy knowing it's going where it needs to go.

I don't expect to "retire" in the traditional sense

I don't intend to quit working altogether and spend all my time lounging on a beach or playing chess in a park against strangers. I like to stay busy, and I love working, especially now that I've changed careers and leaned into the possibilities and promise of remote freelance work.

Even once I've got even more gray hairs and wrinkles, I hope to still be using my wordsmith skills to turn a profit. This means I'll need less saved for retirement since I intend to still be able to count on a paycheck, even if it's a smaller one than I earn now.

Starting my first retirement account at the age of 40 sure isn't ideal -- but since I can't go back in time and tell a younger me to change careers sooner so she'd have money to save and invest, I have to keep moving forward.

I'm grateful for all I've learned about personal finance and investing over the last couple of years, and happy that I'm finally in a place where I can feel confident about contributing to an IRA. Truly -- better late than never.