ESOP advisor in Millstadt, IL. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement benefit for employees in various industries in Millstadt, IL. They offer business owners an opportunity to transition from their company while significantly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Millstadt, IL business owners can do alone. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in Millstadt, IL and around the country, develop tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're in search of an experienced financial partner in Millstadt, IL who shares your goals of establishing your company and employees for sustained success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors today.
About Employee Stock Ownership Plans (ESOPs)
An ESOP is a qualified retirement plan where employees receive stock of the company that employs them, rather than savings accounts or investments in other companies such as in a 401(k). 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 great incentives to employees while providing businesses with a superior value proposition in the hiring process, and allow business owners to set up a succession plan while maintaining control. Upon reaching retirement, most employees sell the stock at marketplace value.
Perhaps most importantly, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to allocate the tax consequences of the sale instead of having to pay taxes right away. In many cases, ESOPs are a succession 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)
- Additional tax deductions through contributions made to employees
- If the business is eventually 100% owned as an S-Corp by the ESOP, it's free from federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Increase employee motivation and productivity
- Improve employee retention and loyalty
- Facilitate succession planning and business continuity
- Retain control while preparing or easing into retirement
- Increase personal liquidity of owners, but still keep 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 offered to employees as in an ESOP, employees can add their own money to obtain additional shares through payroll deductions, or the company can match employee contributions with stock rather than cash.
Setting up a stock ownership plan doesn't have to exclude your employees from the risk tolerance that comes with diverse investments. In fact, including an ESOP or KSOP to a more traditional retirement plan allows you to receive the benefits of both. The experienced Millstadt, IL ESOP advisors and retirement consultants of Correct Capital can support you find the best retirement plan for you, your business, and your employees.
How Our Millstadt, IL 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 a knowledgeable Millstadt, IL ESOP advisory firm to partner with to get the most out of your plan. When you work with Correct Capital, we:
- Lower your tax liability as much as possible — When you transfer your ownership shares to an ESOP, you can reinvest the proceeds in alternative securities to postpone capital gains taxes on the sales, allowing you to keep more of the profit. To defer 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 the proceeds in qualified replacement securities or QRP. Taxes would be owed until the taxpayer has a disposition 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 design and implement an ESOP suited specifically to you and your company. We like to challenge ourselves and our clients to get creative with retirement plan offerings to optimize the advantages they provide. We'll assess your needs, assess different ESOP options, and propose a tailored ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it's a good idea, we may also recommend combining an ESOP with a 401(k) or different retirement plans to further boost benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and collaborate with them to identify the best tax-advantaged retirement plans for their company. For clients looking at an ESOP, part of that means performing a feasibility analysis to determine if it's a feasible option for your company. We'll examine:
- 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 determine 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 buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Millstadt, IL can help you arrange your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the administration of employee stock ownership plans. For example, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to ask for the employer to buy back them at current market price.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on seniority of service. Usually, that means ownership of the company is passed to the ESOP in increments. 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 progresses and matures, so will its impact on your company. ESOP advisors can plan for these changes and react to them in real time, enabling your plan to stay feasible, in accordance with regulations, and profitable.
- Employee communication and education — Our ESOP advisors offer group sessions and individual consultations with your employees so they can maximize the benefits from your retirement plan. With an ESOP advisor from Correct Capital, your employees won't just acquire a share of your company, but they'll feel like they're gaining ownership of their financial stability and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Millstadt, IL
Correct Capital is an independent advisory firm that specializes in assisting business owners create retirement plans and succession plans for their enterprises. There are multiple factors we believe distinguish us from other investment advisory agencies in Millstadt, 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 variety of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families when managing retirement plans, we're ideally suited to understand the requirements of each and develop a plan that meets the necessities of both, as well as those of your stockholders.
- Our award-winning Millstadt, IL financial advisory team is composed 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 80 years of combined experience, we pool our collective talents and insights to best serve each client distinctively.
- As independent fiduciary advisors, we are legally and ethically bound to do what's in the best interest of you, your employees, and your company. We endeavor to form long-term relationships with our clients grounded in trust and the common goal of growing your and your employees' financial prosperity.
Other services we offer in Millstadt, IL:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- Self-Employed Retirement Plans
- 401(k) For Small Business
Call Correct Capital to Speak With an ESOP Advisor in Millstadt, IL Today
If you're interested in learning more about ESOPs or desire to start the process of setting one up for your Millstadt, IL business, get in touch with a Correct Capital ESOP advisor now. Let us do what we do best so you can focus on what you value most: positioning yourself, your business, and your employees up for achievement. Get in touch with one of our Millstadt, IL ESOP advisors now at 877-930-4015 or contact us online.
