The value in planning your financial future

Submitted by scimino on Fri, 07/15/2016 - 16:00
{"version":"0.3.0","atoms":[],"cards":[],"markups":[["a",["href","http:\/\/\/running-a-practice\/","target","_new"]],["a",["href","http:\/\/\/filecabinet\/Firm Insurance Booklet.pdf","target","_new"]],["a",["href","http:\/\/\/whitepapers\/getting-paid\/","target","_new"]],["a",["href","https:\/\/\/goals\/retirement-planning\/calculator.html","target","_new"]],["a",["href","https:\/\/\/disabilityfacts\/facts.html","target","_new"]],["a",["href","http:\/\/\/retirement-financial-planning-tools\/","target","_new"]],["em"],["a",["href","http:\/\/\/","target","_new"]]],"sections":[[1,"h2",[[0,[],0,"Architects at all career stages need to assess their finances and plan accordingly"]]],[1,"p",[[0,[],0,"In order to be successful in your professional and personal life, you must understand how to manage money. Good financial management requires effective decision-making in order to accomplish the objectives of your firm and family; this includes raising and allocating funds, long-term budgeting, and allocation of short-term resources such as current liabilities."]]],[1,"p",[[0,[],0,"When it comes to your firm, this includes short- and long-term business planning, management and allocation of expenses, marketing services and cultivating business, collection of receivables, payroll and employee overhead costs, and much more."]]],[1,"p",[[0,[],0,"If you\u2019re an employer, then you know that attracting and retaining employees who are skilled, loyal, and dedicated to your company creates a strong foundation on which your firm can grow. By offering employee benefits, a company tells their employees that they are valued and their contributions are important, creating more incentive to become and stay a part of the team. On the AIA Trust website, the section for established architects on "],[0,[0],1,"running a practice"],[0,[],0," outlines numerous employee benefits that should be considered, along with any needed firm insurance. In addition, the booklet "],[0,[1],1,"Making the Transition to Running Your Own Firm"],[0,[],0," covers the many insurance coverage issues that a professional practice must consider."]]],[1,"p",[[0,[],0,"Money is the measure and fuel of any business, including a design firm. You need to be aware of the correlation between unpaid fees and troubled projects that can result in lawsuits alleging professional negligence. The AIA Trust white paper on "],[0,[2],1,"getting paid without getting sued"],[0,[],0," addresses the topic of payment issues, which can be the single greatest warning sign of a project in trouble. The paper outlines financial success as a project-long process, providing insights and tools to assist you as the member in making the process successful."]]],[1,"h3",[[0,[],0,"Managing your own finances"]]],[1,"p",[[0,[],0,"In your personal life, you also must manage expenses within your income and strategically plan for future expenses, whether they include a home mortgage, tuition expenses, future retirement, and other goals."]]],[1,"p",[[0,[],0,"Regarding retirement planning, per 2016 IRS regulations the maximum contribution to a 401(k) for individuals under age 50 is $18,000. There are many online calculators available to calculate your own retirement needs and savings, such as this "],[0,[3],1,"retirement planning calculator"],[0,[],0," from AIA Trust partner AXA. There are also many approaches you may take to retirement plans: "]]],[3,"ul",[[[0,[],0,"If you\u2019re a sole proprietor, an owners-only 401(k) combines the benefits of profit sharing and 401(k) plans without costly set-up charges. You may also be able to defer more than in other types of plans."]],[[0,[],0,"If you\u2019re an owner with younger employees looking to maximize for retirement, you may be able to take advantage of age-weighted allocations and new comparability plans that enable you to have designated plan participant groups to make larger contributions for those closest to retirement."]],[[0,[],0,"If you\u2019re in an established plan with assets over $500,000, you may want to consider a program that includes a group variable annuity with no asset fees or set-up charges."]],[[0,[],0,"An individual variable annuity program can grow your retirement assets and address the ups and downs of a fluctuating market by investing on a tax-deferred basis with a capped rate of return tied to the performance of a specified index with some downside protection. "]]]],[1,"h3",[[0,[],0,"Get insured"]]],[1,"p",[[0,[],0,"When looking at your own personal financial planning, insurance coverage should also be considered. If you have a family, life insurance is a vital tool to ensure their lifestyle should you die prematurely. And disability insurance should be considered, regardless of your family status, since disability benefits will help you to pay your personal expenses\u2014and may be used to cover business expenses\u2014should you become disabled at any time."]]],[1,"p",[[0,[],0,"Many assume that having a disability is age-related, but chances of a disability are greater than you may think. According to a "],[0,[4],1,"2015 study by the Social Security Administration"],[0,[],0,", one in five people have a disability in the U.S. and a 20-year-old today has more than a 25 percent chance of becoming disabled before reaching retirement age."]]],[1,"blockquote",[[0,[],0,"Money is the measure and fuel of any business, including a design firm."]]],[1,"p",[[0,[],0,"There are other important uses to consider for life insurance, such as key person and buy\/sell agreements for practices, savings for retirement or college funding, or even bequeathing a legacy. Coverage through your employer will terminate if you lose your job, and if you wait until you\u2019re older to take out a policy your premiums will likely be higher, if you even qualify for coverage. Long-term care Insurance is also worth considering, especially when you\u2019re younger and premiums are dramatically lower. As an employee, you will likely need to proactively supplement employer benefits with your own savings plan and policies to ensure your financial well-being."]]],[1,"p",[[0,[],0,"For a range of useful financial planning tools, visit the AIA Trust\u0027s section on "],[0,[5],1,"retirement and financial planning"],[0,[],0,". Whether employer or employee, you need to take a serious look at your own financial wellness programs, consider your short- and long-term needs, and plan accordingly."]]],[1,"p",[[0,[6],1,"This story originally ran in the AIA CRAN Chronicle for July 2016."]]],[1,"p",[[0,[6],0,"Ann Casso, Hon. AIA is the Executive Director of the "],[0,[7],1,"AIA Trust"],[0,[],1," for the last 14 years, focusing on their two-pronged charge to serve AIA members and components as an indispensable risk management resource and by offering valuable insurance and financial programs."]]]]}
In both their personal and professional lives, architects need to know how to manage money.
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