As we begin a new year, many architects will set priorities and goals – especially those who own their own firms. The time is now to set up your 401(k) Plan – to achieve your personal financial goals and for your employees to achieve theirs.
Establishing a sound business plan for the year, confirming that you have the right staff and business partners for your projects, and networking with your community to promote your firm are essential. Taking steps early to identify opportunities can make a difference in winning projects. The same is true for personal finances and establishing employee benefits for your firm. These priorities should be considered and planned with the same attention given to your other personal and professional goals.
Timing is everything with investing and the same could be said for setting up your firm’s 401(k) plan. It’s important for the firm owner to recognize that the groundwork for adopting a plan is best done early in the year.
Since a 401(k) plan involves eligible employees electing to defer a portion of their salary, the more payroll periods available, the less noticeable the impact will be on take-home pay. Contributions must be sent to the retirement plan to be invested; therefore, coordination with your payroll system will be necessary. In addition, eligible employees will need to decide their investments.
Importantly, the longer one is invested, the more one can potentially benefit from the power of compounding. Compounding occurs when any earnings from investments are reinvested and potentially produce more earnings. It’s like a snowball effect – each year’s gains can build on those of the past, potentially increasing the overall growth of the investment.
Making such long-term decisions may be difficult under the pressure of an October deadline to set up a 401(k) plan for 2019. The earlier in the year you can do this, the easier you make it for yourself and eligible employees.
So, when is the best time to consider setting up your practice’s new 401(k) plan for 2019? Answer: NOW.
The AIA Trust is here to help
The AIA Trust offers retirement savings and distribution vehicles through AXA Equitable to assist you in achieving your retirement goals. Plans can be established for one-person firms (or components)—or for many employees—utilizing a variety of retirement savings and distribution vehicles.
AXA Equitable can assist you toward achieving your goals based on 50 years’ experience working with association members and over 25 years with AIA architects. AXA Equitable can help you review your options and offer you choices that can alleviate the burden of establishing and managing a retirement savings plan. It’s one of the ways that the AIA Trust makes it easier for you to focus on doing what you do best: architecture.
Please call 800-523-1125 to speak with a retirement program specialist or visit www.TheAIATrust.com/retirement-plans/ to learn how you can start saving.
This article has been written for general information purposes only. This material does not constitute an offer or solicitation of any kind and is not intended, and should not be relied upon, as investment, tax, legal, or financial advice or services.
The Members Retirement Program contract form #6059 is funded by a group variable annuity contract issued and distributed by AXA Equitable Life Insurance Company (AXA Equitable), NY, NY. Annuities have limitations and restrictions. For costs and complete details contact a Retirement Program Specialist. AXA Equitable and its affiliates do not provide tax or legal advice and are not affiliated with the AIA. You should consult with your attorney and/or tax advisor before purchasing a contract.
© 2018 DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions.
Please always consider the charges, risk, expenses, and investment objectives carefully before purchasing any financial product, including mutual funds or variable annuities. For a prospectus containing this and other information, please contact a financial professional. Read it carefully before you invest or send money.