10 Financial Things to Do Before You Turn 40

Forty isn’t old. Far from it.

But 40 is the age where financial mistakes get expensive to fix.

Insurance premiums jump. Pre-existing conditions start showing up. Retirement isn’t some distant concept anymore. And your family depends on you more than ever.

I’ve seen too many 45-year-olds scrambling to fix things they should’ve sorted at 38. The insurance they can’t get because of a health condition that showed up at 42. The will they never wrote because “there’s time.” The spouse who doesn’t know where anything is.

If you’re approaching 40, or just crossed it, here’s what actually matters. Not vague advice about “starting to save” but specific things you can check off in the next few months.

1. Have Term Insurance Equal to 15x Your Income

This is the big one.

Term insurance gets more expensive every year you wait. And after 40? The jump is significant. A 35-year-old pays roughly 30% less than a 40-year-old for the same coverage. A 45-year-old pays nearly double what the 35-year-old paid.

But it’s not just about premiums.

After 40, pre-existing conditions start appearing. That slightly elevated blood sugar. The borderline high blood pressure. Things you haven’t even noticed yet might show up in the medical tests.

Once something shows up, you’re either paying higher premiums, getting exclusions, or being declined altogether.

The math: If you earn 20 lakhs a year, you need at least 3 crores in term coverage. Add any outstanding home loans on top.

What to do:

• If you don’t have term insurance, buy it this month. Not this quarter. This month.
• If you have term insurance but bought it 5+ years ago, check if coverage still makes sense. Your income has probably grown. Your coverage should have too.
• Consider top-up policies if your health allows

See: 5 Things to Check in Your Term Insurance Today

2. Own a Health Insurance Policy (Not Just Your Employer’s)

This one trips up so many people.

You have a comfortable corporate job with great health coverage. Why would you pay for your own policy?

Because when you leave that job, voluntarily or otherwise, your coverage ends. And if you’re 44 with a recent health issue, buying new insurance means:

• Waiting periods for pre-existing conditions (2-4 years typically)
• Higher premiums
• Possible exclusions for the exact thing you’re worried about

Corporate policies are a bonus. Not your primary protection.

What to do:

• Buy an individual health policy (or family floater) while you’re healthy
• Aim for at least 10-15 lakhs base coverage, with a super top-up for emergencies
• Buy it before any health issues develop

The person who buys health insurance at 35 with a clean medical history is in a much better position than the person who tries at 45 after a diabetes diagnosis.

3. Have a Written Will

“I’ll write a will when I’m older.”

This is what people say. Then they don’t. Because there’s always time. Until there isn’t.

If you have assets and dependents, you need a will. It’s not about being morbid. It’s about being practical.

Without a will:

• Your assets get distributed according to succession laws, which may not match your wishes
• Your family may spend months and lakhs on succession certificates
• Property disputes can drag on for years

Writing a basic will takes 30 minutes with a lawyer. Maybe an hour if you have complex assets. That’s it.

What to include:

• List of all assets (property, accounts, investments)
• Who gets what
• Guardian for minor children
• Executor who’ll manage the process

What to do:

• If you don’t have a will, make an appointment with a lawyer this month
• If you have a will, check when you last updated it. Major life events (new property, new child, divorce) require updates

See: Estate Planning Checklist India

4. Know Your Retirement Number

Here’s a question most people can’t answer: How much do you need to retire?

Not a vague “enough to be comfortable.” An actual number.

Simple calculation:

1. What monthly income do you need at 60? (Account for inflation. ₹1 lakh today might need to be ₹2-3 lakhs in 20 years.)
2. Multiply by 300 (that’s 25 years of retirement × 12 months)

Example: If you need ₹1.5 lakhs per month at retirement: 1.5 lakhs × 300 = ₹4.5 crores

That’s your target corpus.

Now the harder question: Are you on track?

If you’re 38 with ₹50 lakhs saved and need ₹4.5 crores, you need to seriously increase your savings rate or adjust your expectations.

What to do:

• Calculate your number (even a rough estimate helps)
• Look at your current investments and project forward
• If there’s a gap, figure out how to close it now, not at 55

5. Have a 6-Month Emergency Fund

The old advice was 3 months. That’s not enough anymore.

At 40, your responsibilities are higher. You probably have a home loan, kids in school, aging parents to consider. If you lose your job or face a health crisis, 3 months evaporates fast.

Six months gives you real breathing room. Time to find the right next opportunity instead of taking the first offer out of desperation.

Where to keep it:

• Liquid mutual funds (access within 1-2 days)
• High-yield savings account
• Fixed deposits with premature withdrawal option

Not in stocks. Not in your trading account. Somewhere boring and accessible.

What this protects: Your emergency fund isn’t just for emergencies. It protects your other investments. Without it, you’re forced to sell your mutual funds or break your FDs at the worst possible time.

6. Update All Your Nominees

Quick quiz: Who’s the nominee on your oldest bank account?

If you have to think about it, that’s a problem.

Nominees get added when accounts are opened and then forgotten. The bank account from your first job might still have your parent as nominee. The mutual fund from 2015 might have an ex-girlfriend. The EPF might have your father who passed away three years ago.

Outdated nominees mean:

• Delays in claims
• Extra paperwork
• Family confusion about who gets what
• In worst cases, legal disputes

What to check:

• Bank accounts (savings, FDs)
• Mutual funds (every folio)
• Demat account
• PPF
• EPF
• Insurance policies
• NPS

What to do:

• Set aside 2 hours this weekend
• Log into each account and verify nominees
• Update anything outdated (most can be done online now)
• Save acknowledgments

See: When and How to Update Nominees

7. Consolidate Your Investments

Here’s what happens over a career:

You open a mutual fund account because someone recommended it. A few years later, you try another platform. Then your company has a mandatory investment scheme. Then you buy some stocks through one broker and some through another.

By 40, you have:

• 4 different mutual fund platforms
• 2 demat accounts
• Old PF from a company you left 8 years ago
• Insurance policies scattered across 3 providers

This isn’t just messy. It’s a problem for your family if something happens to you.

Imagine your spouse trying to track down 15 different accounts across 8 different platforms, with no idea what exists where.

What to do:

• List every investment account you have
• Consolidate mutual funds to 2 platforms max (makes tracking easier)
• Consider consolidating old EPF into current account
• Close accounts you don’t use

The goal: Your entire financial life should fit on one page.

8. Have “The Conversation” With Your Spouse

Does your spouse know:

• All your bank accounts and approximate balances?
• Where your investment accounts are?
• How to access them if something happens?
• Who your insurance agent is and how to file a claim?
• What the home loan status is?
• Where the property papers are kept?

For most couples, the answer to at least half of these is “no.”

This isn’t about trust. It’s about logistics. One person typically handles finances. If that person is suddenly gone, the other is left scrambling during the worst time of their life.

What to do:

• Schedule an hour with your spouse (really, put it on the calendar)
• Walk through everything: accounts, investments, insurance, loans
• Share passwords or show where they’re stored
• Explain what to do if something happens

This conversation feels awkward. Do it anyway. It’s one of the most important things you’ll do.

See: Does Your Family Know Where Everything Is?

9. Review Your Insurance Coverage Adequacy

Here’s a pattern I see often:

Someone buys ₹50 lakh term insurance in their late 20s. They’re earning ₹6 lakhs a year. The coverage is more than 8x their income. Good decision.

Ten years later, they’re earning ₹25 lakhs. They have a ₹80 lakh home loan. They have two kids who’ll need college funding.

Same ₹50 lakh policy. Now it’s barely 2x income. It won’t even cover the home loan.

Insurance isn’t a one-time purchase. It needs to grow with your life.

What to check:

• Term insurance: Is coverage at least 10-15x current income plus outstanding loans?
• Health insurance: Is base cover at least ₹10-15 lakhs?
• Critical illness: Do you have any coverage for major illnesses that won’t kill you but will stop you from working?

What to do:

• Calculate your current coverage ratio
• If it’s fallen below 10x, get quotes for additional coverage
• Consider riders like critical illness if you don’t have separate cover

See: 5 Things to Check in Your Term Insurance Today

10. Document Everything in One Place

All the items above mean nothing if your family can’t find them when needed.

It’s not enough for you to know where things are. Your spouse needs to know. Your adult children need to know. Someone besides you needs to be able to piece together your financial life.

What to document:

• All bank accounts with account numbers
• All investment accounts with login info
• All insurance policies with policy numbers and claim contacts
• All loans with outstanding amounts
• All properties with location of documents
• Key contacts: CA, lawyer, financial advisor

Where to keep it:

• A secure document (physical or digital)
• Shared with at least one trusted person
• Updated at least twice a year

This is exactly what Anshin does. One place for all your financial information, organized clearly, and shared with the people who need it when they need it. But whether you use an app or a spreadsheet or a notebook, the point is the same: it has to be written down somewhere your family can access.

Where Most 40-Year-Olds Fall Short

After talking to hundreds of families, here’s what I see:

Great at earning, poor at organizing. The same people who build successful careers often have chaotic financial records. Multiple accounts, outdated nominations, no central list of anything.

Assume family knows things they don’t. “My wife knows about the insurance” often means “I mentioned it once three years ago.” That’s not the same as knowing.

Postpone “that conversation.” The will gets delayed. The nominee update gets skipped. The spouse conversation gets pushed to next month. Always next month.

Focus on accumulation over protection. Obsess over portfolio returns while ignoring insurance gaps. Building wealth matters. Protecting it matters more.

What to Do Before Your Next Birthday

If you’re turning 40 soon (or just did), here’s your action list:

This week:

• Check your term insurance coverage ratio
• Verify nominees on your main bank account and one investment account

This month:

• Buy term insurance if you don’t have enough (premiums only go up)
• Buy personal health insurance if you rely only on employer coverage
• Have the money conversation with your spouse

This quarter:

• Get a will drafted
• Calculate your retirement number
• Consolidate scattered investments
• Document everything in one place

None of this is complicated. But all of it matters.

The difference between a comfortable 50s and a stressful one often comes down to what you did or didn’t do in your late 30s.

You have the time. But not as much as you think.