ESOP advisor in Fairview Heights, IL. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement plan for employees in various industries in Fairview Heights, IL. They offer business owners a chance to step away from their company while greatly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Fairview Heights, IL business owners can do by themselves. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in Fairview Heights, IL and around the United States, establish tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're looking for a trustworthy financial partner in Fairview Heights, IL who shares your goals of building your company and employees for sustained success, call Correct Capital at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors today.
About Employee Stock Ownership Plans (ESOPs)
An ESOP is a qualified retirement plan where employees receive shares of the company they work for, rather than savings funds or investments in other companies as in a typical retirement plan. ESOPs are fully funded by the employer, and often times shares offered to employees are not voting shares, meaning control of the company stays with the C-suite. They offer great incentives to employees while providing businesses with an improved value proposition in the hiring process, and allow business owners to set up a succession plan while preserving control. When they retire, most employees sell the stock at marketplace value.
Perhaps even more importantly, by selling part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to spread out that tax hit instead of needing to pay taxes at once. In many cases, ESOPs are a succession plan that keeps the most amount of money feasible in your pocket.
Benefits of an Employee Stock Ownership Plan
- Sell a portion of your business (minimum 30%) with deferment of capital gains taxes (provided you reinvest into qualified replacement securities)
- Further tax deductions through contributions made to employees
- If the business is eventually 100% owned as an S-Corp by the ESOP, it's exempt from federal income taxes
- Align the goals of employees and stockholders
- Present a higher value proposition when hiring
- Boost employee motivation and productivity
- Enhance employee retention and loyalty
- Enable succession planning and business continuity
- Keep control while planning or easing into retirement
- Increase personal liquidity of owners, but still hold on to control of the company
- Preserve your business' legacy and culture
What About KSOPs?
A KSOP is a tax-advantaged plan that is a mix between an ESOP and a 401(k). Ownership shares are provided to employees as in an ESOP, employees can contribute their own money to obtain additional stock through payroll deductions, or the company can match employee contributions with shares rather than cash.
Setting up a stock ownership plan doesn't have to exclude your employees from more diverse investments. In fact, introducing an ESOP or KSOP to a more traditional retirement plan allows you to obtain the benefits of both. The experienced Fairview Heights, IL ESOP advisors and retirement consultants of Correct Capital can aid you find the best retirement plan for you, your business, and your employees.
What Our Fairview Heights, IL ESOP Advisors Do for You
Whether you're stepping from control of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Fairview Heights, IL ESOP advisory firm by your side to reap the most benefits of your plan. When you work with Correct Capital, we:
- Minimize your tax liability as much as possible — When you sell your ownership shares to an ESOP, you can reinvest the proceeds in different securities to defer capital gains taxes on the sales, permitting you to retain more of the profit. To postpone capital gains taxes, your ESOP advisor can help you perform a Section 1042 exchange by selling at least 30% of your company to the ESOP and reinvesting the proceeds in qualified replacement securities or QRP. Taxes would be owed until the taxpayer has a sale of the QRP. An ESOP advisor can assure you obtain the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll develop and set up an ESOP that works best for you and your one-of-a-kind company. We like to push ourselves and our clients to get imaginative with retirement plan offerings to optimize the advantages they offer. We'll evaluate your needs, evaluate various ESOP options, and recommend a tailored ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also suggest combining an ESOP with a 401(k) or other retirement plans to further boost benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and work together with them to discover the best qualified retirement plans for their business. For clients looking at an ESOP, part of that means conducting a feasibility analysis to determine if it's a workable option for your company. We'll analyze:
- Cash flow, debts, and overall financial health
- Ownership structure to understand the implications of introducing an ESOP
- Employee demographics to understand how they're best served
- Tax implications for both your company and shareholders
- Company culture and employee engagement to see if an ESOP is likely to be well-received and supported
What if your business isn't a great fit for an ESOP? We'll partner with you to find a retirement or succession plan that works for you.
- Connect you with valuation firms and trustees — Implementing and maintaining an ESOP involves a lot of moving parts, including accountants, attorneys, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Fairview Heights, IL can help you establish your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the administration of retirement plans. For instance, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to require the employer to repurchase them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on length of service. Most of the time, that means ownership of the company is passed to the ESOP in phases. Depending on how you structure your company and the plan, your ESOP may start with 30%, but could ultimately achieve 100% ownership. As the plan develops and matures, so will its impact on your company. ESOP advisors can plan for these changes and react to them in real time, allowing your plan to stay workable, compliant, and profitable.
- Employee communication and education — Our ESOP advisors offer group meetings and one-on-one meetings with your employees so they can get the most from your retirement plan. With an ESOP advisor from Correct Capital, your employees won't just get a share of your company, but they'll feel like they're achieving ownership of their economic well-being and future.
Why Choose Correct Capital as Your ESOP Advisor in Fairview Heights, IL
Correct Capital is an independent advisory firm that specializes in helping business owners establish retirement plans and succession plans for their enterprises. There are several factors we believe set us apart from other financial consulting companies in Fairview Heights, IL, and throughout the United States:
- A member of the National Association of Plan Advisors (NAPA), Correct Capital was recently named one of their Top Defined Contribution (DC) Teams with Assets under Advisement of at least $100 million. Correct Capital is the only advisory firm in Missouri to achieve this distinction.
- We know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a wide range of industries, including for construction companies and contractors. As we work with both businesses and individuals and families to aid in setting up retirement plans, we're perfectly positioned to understand the requirements of each and develop a plan that fulfills the requirements of both, as well as those of your stockholders.
- Our award-winning Fairview Heights, IL financial advisory team is made up of a diverse range of financial expertise, including an Accredited Investment Fiduciary®, multiple CERTIFIED FINANCIAL PLANNER™ professionals, a certified public accountant, and a six-time Barron's Top 1200 Advisor. With over 80 years of combined experience, we pool our collective talents and insights to effectively cater to each client individually.
- As independent fiduciary advisors, we are legally and ethically bound to do what's in the optimal interest of you, your employees, and your company. We aim to establish long-term relationships with our clients grounded in trust and the mutual goal of growing your and your employees' wealth.
Other services we offer in Fairview Heights, IL:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
Call Correct Capital to Speak With an ESOP Advisor in Fairview Heights, IL Today
If you're interested in learning more about ESOPs or desire to commence the process of setting one up for your Fairview Heights, IL business, contact a Correct Capital ESOP advisor now. Let us do what we do best so you can focus on what you care about most: establishing yourself, your business, and your employees up for prosperity. Reach out with one of our Fairview Heights, IL ESOP advisors now at 877-930-4015 or contact us online.
