Your 40s is a very different phase of life when compared to what’s gone before. No longer do you have the excuse of youth (despite your internal protestations), you’re among the more experienced people at work and your day-to-days are full of considerable responsibility as you edge towards your half century.

You may have bought your own home (with a chunk paid off the mortgage), built up some savings, a share portfolio. Or even bought an investment property.

If you have kids they’ll likely be at school if not further education, still living at home and probably only occasionally contributing to the overall household budget. And your parents too, they’ll be entering a phase of life where they may need more care, which could have financial repercussions for you.

Your earning potential

Your 40s should be some of your peak career years. You’ve carefully built up your knowledge, skills and reputation, and you’ll want to continue building your earning potential over the next decade too.

Research shows, however, that salary growth slows in your 40s and almost reaches a plateau by the time you’re 50¹. So there’s little time to hang about when it comes to asking for that salary increase or going for that promotion. Your salary in your 40s will have a major impact on the quality of your retirement.

Opening up on your own?

With all your experience, your 40s may be the perfect decade to go it alone work-wise. With some savings and equity behind you, you may be in a position to start that business you’ve always dreamed of. After all, 45 is the average age of successful start-up founders in the US².

The reality of your own mortality

So, you have dependents, a mortgage, parents, a possible business and a retirement that are all reliant on you maintaining your health and your ability to continue working well into the future.

However, your 40s is often the decade when your own mortality comes into sharp focus.

It could be reaching the halfway point of average life expectancy, seeing your parents age or watching your own children become real life adults.

It could also be the fact that, statistically, we enter a period of life when serious illness and, yes, death, start to become possibilities with consequences for your loved ones as well as yourself.

In 2017, almost 30 people in their 40s were diagnosed with cancer every day in Australia³. High blood pressure and cholesterol increasingly becoming important health issues too⁴. It's also sobering to note that almost 14 Australians in their 40s died each day.

Protection mode

In order to protect your family, business, assets and future, you need to ensure your life insurance covers everything you need it to – and at the right levels for you.

It may be worthwhile talking to a financial adviser to make sure you have the correct level of life, income protection, illness, accidental death and total and permanent disability insurance for your current circumstances.

Your 40s is a decade to navigate strategically. The course you choose now could determine the rest of your life, which can be an exciting motivation.

References

1. https://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0007/2155507/hilda-statreport-2016.pdf
2. https://hbr.org/2018/07/research-the-average-age-of-a-successful-startup-founder-is-45
3. http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/0DEC5B368C5C2D72CA2581F5001011EB/$File/31010_jun%202017.pdf
4. https://www.heartfoundation.org.au/about-us/what-we-do/heart-disease-in-australia/cardiovascular-risk-profile-of-australians-aged-45-and-over
5. https://www.aihw.gov.au/reports/life-expectancy-death/deaths-in-australia/data

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