Determining the Right Retirement Plan

For architects, establishing a retirement plan for yourself and your firm if you have employees is one of the most important actions you can take. Selecting the right kind of plan for yourself is also critical.

If you have already started a plan, you are on the road to building a more secure retirement for yourself and your employees.  However, as important as establishing a plan is, the need to evaluate your retirement goals and plan design periodically is also important. Over time your retirement goals may change; you may have not been able to save as much as you planned or new plan options may have become available that better meet your needs.

Common Plan Type

Many architects use a 401(k)/Profit sharing plan as their primary retirement plan.

A 401(k) plan is a tax-advantaged, defined-contribution retirement account offered and sponsored by  business owners for their own retirement savings as well as their employees. Contributions to 401(k) accounts are typically made through automatic payroll withholding. Matching is optional, but often offered. The investment earnings are not taxed until withdrawn, typically during retirement.

Cash Balance Plan Option

For architects who have either had a late start or have not saved enough to meet their retirement goals, a new plan option has been gaining some traction recently called a Cash Balance plan. Cash Balance plans can provide the key employees or owners the ability to contribute much higher contribution levels than a 401(k)/Profit sharing plan.

In short, a cash balance plan is a qualified (tax-favored) retirement plan that combines the high contribution amounts of a defined benefit plan with the look, feel and portability of a defined contribution plan. For that reason, it’s called a hybrid plan.

Cash balance plans resemble 401(k) plans in terms of offering individual, portable retirement accounts, but they can allow for significantly higher contribution levels.

Each person has their own unique needs. Determining if you have the best plan type and design for your situation requires individual consultation with a financial advisor.

The AIA Trust is here to help

The AIA Trust offers retirement savings plans and distribution options through Equitable Financial Life Insurance Company (Equitable Financial) 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. Equitable Financial can assist you toward achieving your goals based on over 50 years of experience working with association members and over 25 years with AIA architects. *

Equitable Financial can help you review your options and offer you choices that can help 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.

For additional information on these AIA Trust-endorsed member benefits, or to schedule a meeting with a financial professional, please call Equitable Financial at (800) 523-1125 or visit at equitable.com/mrp.

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 is funded by a group variable annuity contract issued and distributed by Equitable Financial Life Insurance Company (Equitable Financial) NY, NY. Annuities have limitations and restrictions. For costs and complete details, contact a Retirement Program Specialist. Equitable Financial and its affiliates do not provide tax or legal advice. You should consult with your attorney and/or tax advisor before purchasing a contract.

* This reference applies exclusively to Equitable Financial Life Insurance Company.

Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (Equitable Financial) (NY, NY); Equitable Financial Life Insurance Company of America, an AZ stock company with main administrative headquarters in Jersey City, NJ; and Equitable Distributors, LLC. Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI & TN).


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