# 5 Money Moves to Make Before You Turn 40
Your 40th birthday offers a natural checkpoint to reset your financial direction. The decade ahead shapes retirement readiness, so waiting past 40 to act means playing catch-up with compound interest working against you instead of for you.
**Max Out Retirement Contributions**
If you earn under $161,000 as a single filer (2023), contribute the full $6,500 annually to an IRA. Employers typically match 401(k) contributions up to 6 percent of salary, which means free money if you're not claiming it. Once you hit 50, you gain access to catch-up contributions of an additional $1,000 to IRAs and $7,500 to 401(k)s. Starting now closes the gap if you started late.
**Build an Emergency Fund**
Three to six months of living expenses sitting in a high-yield savings account protects you when life happens. Marcus by Goldman Sachs and Ally Bank currently offer rates around 4.5 percent on savings accounts, making this both safe and productive.
**Review and Reduce Debt**
Calculate the total interest you'll pay on remaining balances. Prioritize high-interest debt first. Credit card rates average 20 percent nationally, while mortgage rates hover around 7 percent. Crushing credit card debt before 40 frees cash flow for wealth building.
**Optimize Insurance Coverage**
Term life insurance costs less when you're younger and healthier. A $500,000 20-year term policy for a healthy 35-year-old runs roughly $25 monthly but doubles by age 45. Check that your health, auto, and homeowners policies reflect current needs and carry adequate liability limits.
**Assess Your Investment Mix**
A 40-year