“The best time to plant a tree was 20 years ago. The second best time is now.”

-Chinese proverb

My family recently bought a house. By Arizona standards, it’s an older home, built in 1979. Our front door faces east, getting exposure to the rising sun while our backyard gets the evening sunset. Typically, an east/west exposure is not desirable in the Valley of the Sun. The scorching summer sun heats the house and limits yard time for the kids.

However, years ago the former homeowners planted trees in the front and back yards. Now my family are beneficiaries of these large, mature trees. Our backyard and swimming pool are shaded in the midafternoon and our house is somewhat protected from the harsh rays of the rising and setting sun.

If my yard didn’t have trees, I would be looking at quick fixes to provide shade like awnings, patio shades, or window screens for the house and umbrellas for the pool. Yes, I could plant trees, but it would take discipline and patience. I wouldn’t reap the benefits for several years.

This old Chinese proverb captures the struggle with anything requiring time and patience. Dwelling on the “could’ve, should’ve, would’ve” doesn’t change the fact that you can still act today and change your future. It only causes regret and inaction.

The same is true with retirement planning. I meet with couples in their 30’s who believe they need to play “catch up” because they are just now getting serious about their finances. They probably saw a chart like this and are convinced they missed the millionaire train.

If you are in your 30’s you need to hear this: now is the perfect time to figure out your retirement plan. Sure, it would have been best to start your 401k in your early 20’s, but now that’s irrelevant. The best time to plant a tree was 20 years ago. The second best time is now!

Why else do I think your 30’s is the perfect time to get serious about retirement planning?  Consider these 4 reasons.

1. You’ve accomplished basic financial goals.

For me and my wife, it was challenging to get serious about retirement in our 20’s. We got married at 21 and 20 and had our first child two years later. My career included stops at four employers in this decade of my life.

By age 30, it’s likely you have laid the groundwork by accomplishing some preliminary financial goals, starting a career and learning how to manage your personal finances. You may have even started a family, bought a house, and paid off student loans.

Taking care of some of these goals allows you to focus more time and money on your retirement. What better time than your third decade of life to accomplish this!

2. Your income is higher than 10 years ago.

The second reason your 30’s is the perfect time to plan for your future retirement is monetary. Being 10+ years into your career means your income has likely been increasing. In fact, a 35-year-old has an income almost 50% higher than his/her 22-year-old self.

Hopefully, your budget hasn’t fallen victim to lifestyle creep along the way.

3. You still have 30+ years until retirement.

Who cares that you didn’t start investing when you got that summer job in high school? Even as a 35-year-old, you have the time value of money on your side. A 30-year time horizon is enough of a difference-maker.

Be careful, though. As legendary investor Charlie Munger put it, the “first rule of compounding: never interrupt it unnecessarily.” Your 30-year time horizon will only work if you don’t mess up your strategy. This means not dipping into your 401(k) or trying to time the market. If you’re invested properly, let the market work for you!

4. You are still (likely) in good health.

This reason has to do with your ability to purchase life insurance. The goal of saving money in your 401(k) and Roth IRA is to generate an income stream in retirement. People assume simply saving more money equates to a higher retirement income stream. This isn’t necessarily the case.  

The concept of generating an income stream off your retirement assets is not well understood. As a retiree, you are bound by distribution rates, which have been researched ad nauseum to be around three to four percent. Thus, for someone needing $150,000 per year in retirement, the required nest egg is somewhere between $3.75 million to $5 million.

For a 35-year-old, the annual outlay needed to save this amount can fall around $60,000. That’s a lot of annual savings!

Permanent life insurance (like whole life) is a tool that can increase your retirement distribution rate. Without it, you are bound by those lower rates between three and four percent. With permanent life insurance in place, you could have distribution rates of six to 10%.

Utilizing a retirement income plan that incorporates life insurance requires you to be somewhat healthy. If you are in your 30’s and in decent health, now is a great time to act!

Are you in your 30’s? This is the perfect time to plan!

As a 30-something, you need a plan for your money. Unfortunately, life has gotten in the way. You find yourself making financial decisions alone, without a guide to help show you the big picture. As a result, you’re left feeling uncertain. Planning for your retirement shouldn’t be this difficult!  

I’m (almost) 35 with a family—I get it! As a financial planner who is also a millennial, I’m equipped to help you in this critical decade of your life.

I think you would agree the second best time to plant a tree is now. Let’s work together to figure this out! The first step is to schedule a meeting with me. You don’t need to prepare anything for this first meeting. We’ll simply talk through what you want to accomplish together, and I’ll outline a plan to move forward.

This is the perfect time to plan for your retirement! Doing this now will make your life and finances more enjoyable and give you confidence. The cost of waiting, even another year, is too high. Your future wealth is on the line.

A retirement plan is the tool needed to move from a busy, financially uncertain 30-something to someone enjoying life with confidence in a clear financial picture.