Your 40s are one of the most important decades for superannuation. You still have 20–25 years of compounding ahead of you — enough time to significantly change your retirement outlook — but the decisions you make now matter more than they did in your 30s.
Key Takeaways
- Median Australian super balance at 40–44 is approximately $80,000–$110,000
- Your 40s are often peak earning years — the tax saving from salary sacrifice can be at its largest
- With approximately 20 years until age 60, compounding still has significant time to work
- Check your insurance cover in super — premiums increase significantly after 40 and the cover amount may reduce
- Review your investment option — a growth allocation may still suit those 20+ years from retirement
How Much Super Should I Have at 40?
Based on APRA data and ASFA modelling:
| Age | APRA Average Balance | On-Track Target (Comfortable Retirement) |
|---|---|---|
| 40–44 | ~$152,000 | ~$200,000 |
APRA average reflects all members including those with interrupted careers, periods of unemployment, or time abroad. Many Australians in their early 40s sit below both the average and the target.
The “on-track target” assumes a single person aiming for a comfortable retirement (~$52,000/year at today’s values) at 67, with partial Age Pension support. It is not a guarantee — it is a rough indicative benchmark.
If your balance is significantly below $150,000 at 40, you are not unusual, but it does suggest action is worthwhile.
What a $200,000 Balance Grows to by 67
At 40 with a $200,000 balance and ongoing 12% SG contributions on an $80,000 salary, at a 7% annual return:
- At age 50: ~$470,000
- At age 60: ~$860,000
- At age 67: ~$1,200,000+
Small changes in contribution rate or investment return compound significantly over 27 years. See the Super Calculator to model your own scenario.
Why Your 40s Matter More Than Your 20s
Counterintuitively, dollars contributed in your 40s may be more impactful than those in your 20s — because your income (and marginal tax rate) is likely higher, meaning:
- The tax saving on salary sacrifice is larger — if you’re earning $100,000+, your marginal rate is 34.5%, and the gap versus 15% contributions tax is 19.5%+ per dollar
- Carry-forward contributions — if your Total Super Balance (TSB) is under $500,000, you can use unused concessional cap space from the past 5 years, potentially contributing much more than $30,000 in a single year
Key Strategies in Your 40s
1. Review your investment option
Most Australians default into a balanced or lifecycle option. At 40, with 25+ years until retirement, a growth or high growth option may generate significantly higher returns. The additional short-term volatility is recoverable over this time horizon.
2. Start salary sacrificing
Even $5,000–$10,000/year in salary sacrifice can make a material difference by 67. The tax saving is real and immediate — see the Salary Sacrifice Super Calculator.
3. Check and reduce fees
Moving to a lower-fee fund (even a 0.5% fee reduction) on a growing balance adds meaningfully over 25 years. See Cheapest Super Funds Australia.
4. Consolidate old accounts
Many Australians in their 40s have multiple accounts from previous jobs, each draining insurance premiums and administration fees. Consolidate into one — but check insurance first.
See How to Consolidate Your Super.
5. Use carry-forward concessional contributions
If you have had years of low or no concessional contributions (e.g., career break, low-income period, time overseas), and your TSB is under $500,000, you may be able to “catch up” by contributing more than the $30,000 annual cap.
See Carry-Forward Contributions Explained.
6. Make a binding death benefit nomination
At 40 you likely have dependants — a partner, children. Ensure your super goes where you intend by lodging a binding death benefit nomination.
See Binding Death Benefit Nominations Explained.
Common Mistakes in Your 40s
- Staying in a conservative or balanced option when a growth option would be appropriate given your time horizon
- Ignoring old accounts accumulating fees in funds from your 20s
- Not salary sacrificing because mortgage and expenses feel tight — even $200/fortnight adds up significantly over 25 years
- Not having a BDBN — particularly important if you have children from a previous relationship or a blended family
For further reading: Super Calculator — Project Your Retirement Balance, Super at 60 — What Changes and What Are Your Options?, Boosting Your Super Before Retirement. For advice tailored to your situation, speak with a licensed financial adviser through MoneySmart.