ESOP advisor in Kirkwood, MO. Employee stock ownership plans (ESOPs) have become an increasingly common retirement benefit for employees in various industries in Kirkwood, MO. They offer business owners a chance to move on from their company while considerably 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 Kirkwood, MO business owners can do without professional help. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in Kirkwood, MO and around the nation, develop tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're looking for a trustworthy financial partner in Kirkwood, MO who shares your goals of establishing your company and employees for sustained success, call Correct Capital at 314-930-4015, contact us online, or schedule an appointment with one of our financial advisors now.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged retirement plan where employees receive stock of the company they work for, rather than savings accounts or investments in other companies as in a typical retirement plan. ESOPs are 100% company funded, and often times shares offered to employees are not decision-making shares, meaning control of the company stays with the C-suite. They offer excellent incentives to employees while providing businesses with an improved value proposition to employees, and allow business owners to set up a succession plan while retaining control. When they retire, most employees sell the stock at market value.
Of special interest to business owners, by selling part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to distribute that tax hit instead of being required to pay taxes immediately. In many cases, ESOPs are a transition plan that keeps the most amount of money attainable with the owner.
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)
- Extra tax deductions through contributions made to employees
- If the business is one day 100% owned as an S-Corp by the ESOP, it's free from federal income taxes
- Align the goals of employees and stockholders
- Provide a higher value proposition when hiring
- Increase employee motivation and productivity
- Enhance employee retention and loyalty
- Facilitate succession planning and business continuity
- Keep control while planning or easing into retirement
- Boost personal liquidity of owners, but still keep control of the company
- Carry on your business' legacy and culture
What About KSOPs?
A KSOP is a tax-advantaged plan that is a combination of an ESOP and a 401(k). Ownership shares are extended to employees as in an ESOP, employees can contribute their own money to purchase additional stock through payroll deductions, or the company can match employee contributions with shares instead of cash.
Setting up a stock ownership plan doesn't have to exclude your employees from more diverse investments. In fact, including an ESOP or KSOP to a more traditional retirement plan allows you to attain the benefits of both. The experienced Kirkwood, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
How Our Kirkwood, MO ESOP Advisors Can Help
Whether you're stepping from ownership of your company or are interested in an ESOP's other benefits, you'll need an experienced Kirkwood, MO ESOP advisory firm to partner with to get the most out of your plan. When you work with Correct Capital, we:
- Reduce your tax liability as much as possible — When you transfer 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 keep more of the sales proceeds for various purposes. To postpone capital gains taxes, your ESOP advisor can help you execute a Section 1042 exchange by selling at least 30% of your company to the ESOP and reinvesting that money in qualified replacement securities or QRP. Taxes would be owed until the taxpayer has a disposition of the QRP. An ESOP advisor can guarantee you receive the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and execute an ESOP suited specifically to you and your company. We like to test ourselves and our clients to get imaginative with retirement plan offerings to optimize the benefits they provide. We'll evaluate your needs, evaluate several ESOP options, and suggest a customized ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also recommend combining an ESOP with a 401(k) or different retirement plans to further increase benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and work together with them to discover the optimal tax-advantaged retirement plans for their business. For clients interested in an ESOP, part of that means carrying out 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 assess 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 CPAs, lawyers, and a trustee to acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Kirkwood, MO can help you arrange your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the management of retirement plans. For example, when individuals enrolled in an employee stock ownership plan at a closely held employer receive company stock in an ESOP distribution, they have the option to ask for the employer to redeem them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on duration of service. Most of the time, that means ownership of the company is sold to the ESOP in stages. 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 evolves and matures, so will its implications for your company. ESOP advisors can plan for these changes and react to them in real time, facilitating your plan to stay workable, in accordance with regulations, and advantageous.
- Employee communication and education — Our ESOP advisors offer group sessions and one-on-one meetings with your employees so they can maximize the benefits from your ESOP. With an ESOP advisor from Correct Capital, your employees won't just attain a portion of your company, but they'll feel like they're achieving ownership of their economic well-being and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Kirkwood, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners arrange retirement plans and succession plans for their enterprises. There are multiple factors we point to that make us unique from other financial consulting companies in Kirkwood, MO, and throughout the nation:
- 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're experienced in 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 when managing retirement plans, we're perfectly positioned to understand the requirements of each and establish a plan that fulfills the needs of both, as well as those of your stockholders.
- Our award-winning Kirkwood, MO financial advisory team is made up of a wide 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 eight decades of combined experience, we pool our collective talents and insights to optimally assist each client distinctively.
- As independent fiduciary advisors, we are lawfully and ethically bound to do what's in the optimal interest of you, your employees, and your company. We aim to forge long-term relationships with our clients founded on trust and the common goal of increasing your and your employees' financial prosperity.
Other services we offer in Kirkwood, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
- Retirement Calculator
Call Correct Capital to Speak With an ESOP Advisor in Kirkwood, MO Today
If you're interested in learning more about ESOPs or aspire to start the process of setting one up for your Kirkwood, MO business, contact a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you care about most: positioning yourself, your business, and your employees up for prosperity. Get in touch with one of our Kirkwood, MO ESOP advisors today at 314-930-4015 or contact us online.