Table of Contents Expand Table of Contents Typical Portfolios of Those in Their 40s How Much Should Someone in Their 40s Have Invested How Should You Divide Up Your Portfolio? Improving Returns Without Taking Excessive Risk Interested in Stock Market Gains? Here's the Average Portfolio for People in Their 40s By Daniel Liberto Full Bio Daniel Liberto is a journalist with over 10 years of experience working with publications such as the Financial Times, The Independent, and Investors Chronicle. Learn about our editorial policies Published October 31, 2025 Tips to boost your investment portfolio in your 40s include making sure you're putting your money in the right mix of investments. See More MoMo Productions / Getty Images Close Key Takeaways According to Empower, the average person in their 40s holds about half their portfolio in stocks, with the rest split between cash, alternative investments, and a small amount of bonds.In this age group, experts suggest you have about three times your current income saved for retirement and invest anywhere from 70% to 80% in stocks. Everyone wants their money to grow in value as much as possible, but our ideas on how to do that can differ considerably. The stakes are generally even higher when we hit our 40s. At that age, the average person has reached or is close to their peak earnings and is close enough to retirement that it's no longer so abstract. How does the average American in their 40s invest for their future? According to Empower, mainly through stocks and alternative investments. Typical Portfolios of Those in Their 40s This fall, Empower collected user data to determine how people are investing by age group. The portfolio mix reflects the average split for those in their 40s: How Much Should Someone in Their 40s Have Invested Experts often use multiples of annual income as a guide to stay on track for retirement. The standard advice shared by the likes of Fidelity, Equifax, and T. Rowe Price is that by your mid-40s, you should have three times your current income set aside for when you stop working. That means if you earn $70,000, you should already ideally have $210,000 set aside. Conversely, if you earn $100,000 or $40,000, you should have $300,000 or $120,000 saved, respectively. Of course, this is just a rough guide—not a one-size-fits-all rule. Your actual needs depend on your income, expenses, and so on. Related Education Curious About Early Retirement? See How 401(k) Balances Compare for Those in Their 40s and 50s Retirement Savings in Your 30s: How Your Contribution Rate Stacks Up Against Others Your Age How Should You Divide Up Your Portfolio? Ask most financial experts how an investment portfolio should look in your 40s, and they’ll probably say between 70% and 80% of your investments should be in stocks, with much of the rest in bonds. The reason younger people are advised to invest more in stocks is because of their higher potential for growth. Without accounting for inflation, the S&P 500 has delivered an average annual return of over 10% since 1957, while U.S. bonds, from 1926 to 2023, generated average annual returns of 5%. If stocks can help our money grow much faster, why are we told to gradually increase our holdings in bonds as we get older? The main reason is that bonds are less susceptible to big sell-offs that can take some time to recover from. The last thing you want, experts generally agree, is to retire in the middle of a bear market and have no choice but to withdraw your money from stocks currently trading at market lows. Improving Returns Without Taking Excessive Risk There are ways to improve your returns without adding highly risky assets to your portfolio. Empower recommends spreading risk by investing in a balanced mix of stocks, bonds, cash, and alternative investments, such as real estate investment trusts and commodities. It also advises regularly monitoring your portfolios, rebalancing them when they stray from your desired mix, and resisting the urge to time the market. T. Rowe Price, meanwhile, suggests people in their 40s contribute as much as they can to retirement accounts, supplement savings with an account where you pay taxes beforehand, such as a Roth IRA, and put a good portion of their portfolio in stocks, given there are still several decades to go until retirement. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Federal Reserve. "Changes in U.S. Family Finances from 2019 to 2022." Page 36. Empower. "What Is the Average Asset Allocation by Age?" Fidelity. "How Much Do I Need to Retire?" T. Rowe Price. "Retirement Savings by Age: What to Do With Your Portfolio." Equifax. "How Much Money Should I Have Saved by My 40s & 50s?" U.S. Bank. "Investment Strategies by Age." Official Data Foundation. "S&P 500." Credit Union Investment Services. "When Will We Get Back to Average Market Returns?" Take the Next Step to Invest Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Read more Personal Finance Retirement Planning Partner Links Take the Next Step to Invest Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.