Here's the Average 40-Something's Retirement Savings Balance. How Does Yours Compare?

Your 40s are an interesting time in the context of planning for retirement. At that point, you still have a good number of working years left. But you also don't have that much time to ramp up your savings efforts if you haven't really begun to fund an IRA or 401(k) plan.

Of course, one benefit of being in your 40s is that you may be at a point in your career where you're earning a decent chunk of money. And while you no doubt still have mounting expenses, from mortgage loan payments to SAT tutors for your kids, you might have some wiggle room to finally start funding your nest egg consistently.

Now, you may be curious as to what other 40-somethings have saved for retirement. According to Northwestern Mutual's latest Planning & Progress Study, the average 40-something has a nest egg worth $77,400.

Clearly, that's not a small amount of money. But it's also not a ton of money for retirement, either. So if your balance is comparable, you'll want to keep building on it to help ensure that financial worries don't wreck your retirement.

Good progress, but keep the momentum up

Let's be clear. If you're in your 40s with $77,400, you've done a good job of prioritizing your future. But you'll need to keep funding your IRA or 401(k) plan to leave yourself with plenty of money to live on once your career wraps up.

The good news, though, is that you might easily have another 20 years or more in the workforce ahead of you. And if you save and invest consistently, you can grow that $77,400 into a much larger sum.

The stock market has, over the past half-century, delivered an average annual 10% return before inflation, as measured by the S&P 500 index's performance. So let's say you're 45 with $77,400 in savings. Let's also say you're able to add another $400 a month to your savings, all the while investing that money in stocks for an average annual 10% return.

By age 67, you're looking at a balance of about $973,000. That's a nice sum of money to retire with. But you will need to keep funding your savings month after month, and at a decent rate, to get to that point.

What if you're nowhere close to $77,400?

If you're in your 40s and your IRA or 401(k) balance is a lot less than $77,400, you may be panicking. But don't. Even if you have no money saved for retirement to date, there's still time to build up a nice sum for your senior years -- provided you start immediately.

Let's say your nest egg has $0 in it, but you manage to save $400 a month for 22 years at an average annual 10% return. That'll leave you with $343,000, which is actually more than what the average person in their 60s and 70s has saved for retirement, according to Northwestern Mutual.

But if that $343,000 balance doesn't sound great, plan to give yourself more time to build wealth. If you're 45, rather than plan to retire at 67, tell yourself you'll work until age 70.

Contributing $400 a month to your savings for an extra three years and keeping that money invested at 10% a year that much longer will leave you with a balance of $472,000 rather than $343,000. That's a huge difference.

All told, $77,400 is not some magic retirement savings number for 40-somethings. If it's what you have and you keep building on it, you're in good shape. If not, you still have the potential to amass a lot of wealth by the time your career comes to an end.