Five mistakes people make in their 40s and 50s that can derail retirement
- Damon Tuthill
- Jul 30
- 4 min read
Is 40 too late to plan for retirement?
Definitely not. In fact, your 40s and 50s can be the most powerful years for building financial confidence and long-term security.
We work with many Perth and nationally-based families, professionals, and business owners who are entering this life stage with questions like:
How much should you have for retirement?
Can I catch up if I’ve been focused on other priorities?
What if I’m starting at 50? Is it too late?
The answers vary - but one thing is always true: the decisions you make now can dramatically shape your options later. Here are five common mistakes we help clients avoid.
1. Letting your super sit idle
Your super is one of the most tax-effective ways to build long-term wealth, but many people only contribute the minimum required by their employer. These are your peak earning years — don’t miss the chance to accelerate your contributions.
One powerful but often overlooked tool is the carry-forward concessional contributions rule. If your super balance is under $500,000 and you didn’t use your full concessional cap in previous years, you can make extra contributions now and claim a tax deduction.
📘 For more, see the Australian Tax Office's explanation of concessional contribution caps and catch-up rules
What to do:
Speak to an adviser about salary sacrificing or personal deductible contributions
Review your fund’s investment options to ensure they match your timeline
2. Assuming retirement will only last 20 years
Australians are living longer. Many people will spend 25–30 years in retirement, especially women. That’s a long time to make your money last — and it means relying on outdated benchmarks could leave you short.
If you’re wondering how much should you have for retirement, it depends on the lifestyle you want, where you plan to live, and whether you’ll receive the Age Pension.
You can refer to our article on Why waiting until 67 to plan your retirement could cost you for a useful breakdown of timelines and options.
What to do:
Use the ASFA Retirement Standard to estimate your future costs
Consider how your needs may change over time, including health care and aged care
Talk to an adviser about diversifying income sources beyond super
3. Holding onto the wrong insurance — or none at all
Insurance needs shift as your life changes. Yet we often see people in their 40s and 50s holding outdated policies — or cancelling insurance completely — without understanding the risk.
If you’ve paid off your mortgage and your kids are independent, your life cover needs may drop. On the other hand, if you’re still working, income protection could still be essential.
What to do:
Review your cover every couple of years, including policies held inside super
Make sure your levels of cover reflect your current lifestyle, income and liabilities
Don’t cancel a policy without advice — especially if your health has changed
4. Leaving investments on autopilot
Your investment strategy should evolve as you age. Some people stay too aggressive too long; others become overly conservative and lose out on compounding returns.
If you’re in your 50s and still in a high-growth fund without understanding why, it’s time to check in.
What to consider:
Are your investments diversified across asset classes?
Have you reviewed your risk tolerance in the past two years?
Would a transition-to-retirement (TTR) strategy make sense for your income needs?
What to do:
Ask your adviser about shifting to a more balanced or income-focused portfolio
Revisit your investment mix annually — or when your goals change
Consider combining your investment strategy with estate and legacy planning
5. Having no retirement plan at all
Is 50 too late to start saving for retirement? No — but waiting longer could limit your options.
Without a clear strategy, many people reach their late 50s or early 60s without knowing:
When they can afford to retire
What income they’ll have
Whether they’ll outlive their money
Read our retirement article for a helpful breakdown of the three key sources of retirement funding: super, savings, and the Age Pension.
What to do:
Set clear retirement goals — including your ideal age and lifestyle
Map out your income sources and spot any shortfalls
Book a session with Aspire2Wealth to create a realistic plan
Final thought: It’s not too late, but it is time
Your 40s and 50s are a window of opportunity. With the right approach — and a bit of guidance — you can build a retirement plan that gives you options, confidence and freedom.
📅 Book your complimentary retirement strategy session:
Sources:
Aspire2 Wealth Advisers Pty Ltd ABN 42 125 897 903 is an authorised representative and credit representative of Charter Financial Planning Limited ABN 35 002 976 294, AFSL and Australian Credit Licence No. 234665.
This website contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.
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