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No savings at 40? I reckon you can still retire rich by investing in FTSE 100 shares

If you have no savings at 40, you can’t afford to waste time. The sooner you start saving for retirement, the better your chances of enjoying yourself when you get there.

The good news is that at 40, you still have more than 25 years to build up your pension fund. That is plenty of time to benefit from the compounding returns you can generate by investing in top FTSE 100 shares.

You can still get rich and possibly even retire early. That is a much more attractive option than working until your 70s.

No savings at 40 isn’t the end of the world

If you haven’t seriously started saving for the future, your attitude has to change. You might actually enjoy investing, once you get started. If starting from scratch, every year counts, so you need to take action today.

This means you should not wait until current stock market volatility recedes. In fact, you can turn it to your advantage.

Now is a great time to buy cheap FTSE 100 shares. The market is still down by a quarter due to coronavirus. In 25 or 30 years, today’s problems will seem like a blip. Yet the shares you buy today will still be generating income and growth for years into the future.

Having no savings at 40 is something you need to put right now. Say you start investing £500 a month at age 40. By age 66, you will have £440,903, assuming average growth of 7% a year. This is the long-term total return on the FTSE 100, with dividends reinvested for growth.

If you delay for another two years, and do not start investing £500 a month until age 42, you will have dramatically less. Your money will have grown to £373,494 by age 66, assuming the same 7% growth. That is £67,409 less.

Your early contributions are the most valuable, as they have longer to compound and grow. And of course if you keep putting off investing, you will never generate a decent nest egg.

No savings at 40 does not have to be the end of the world. However, if you keep delaying, it might as well be. If have no savings at 45, or 50, your task gets that much harder.

I’d buy cheap FTSE 100 shares today

You won’t generate 7% a year by leaving your money in a Cash ISA. A balanced portfolio of FTSE 100 shares could get you there though. Stock markets can be bumpy, as we have seen in recent months, but over the longer run, they are still the best way to build your long-term wealth.

This is a good opportunity to buy a spread of bargain shares, when prices are depressed by the economic uncertainty. If you wait until the market recovers, you will have lost valuable time, and share prices may be higher too.

It may seem daunting at first, but you will find plenty of advice on the Motley Fool website, and some top share tips too. You can still retire rich, if you act now.

So where to start?

A top income share that boasts a reliably defensive business model… plus a current forecast dividend yield of 4.2% to boot!

With global markets in turmoil as the coronavirus pandemic tightens its grip, turning to shares to generate income isn’t as simple as it used to be…

As the realities of ‘life under lockdown’ begin to bite, many of the stock market’s ‘go-to’ high-yielding companies have either taken an axe to their dividend pay-outs… or worse, opted to suspended them altogether – for the near-term at least.

With so many blue-chip and mid-cap companies scrambling to hoard cash right now, where are we income investors to turn for decent yields?

Fortunately, The Motley Fool is here to help…

Our analyst has unearthed what he believes could be a very attractive option for income- seeking investors – a company that, in his view, boasts a ‘reliably defensive’ business model, combined with a current forecast dividend yield of 4.2% to boot!*

But here’s the really exciting part…

This business even has form in riding out this kind of situation, too… having previously increased sales and profits back in 2008 and 2009 when the world was gripped in the deepest economic crisis since the Great Depression.

*Please be aware that dividends are variable and not guaranteed.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Income Share… free of charge!

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.