ESOP advisor in Swansea, IL. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement plan for employees in a variety of sectors in Swansea, IL. They offer business owners an opportunity to step away from their company while greatly 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 Swansea, IL business owners can do without professional help. Correct Capital's knowledgeable and savvy ESOP advisors help businesses of all sizes, in Swansea, IL and around the nation, design tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're seeking a trustworthy financial partner in Swansea, IL who shares your goals of establishing your company and employees for long-term 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 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 governing shares, meaning control of the company stays with the C-suite. They offer fantastic incentives to employees while providing businesses with an enhanced value proposition to employees, and allow business owners to set up a succession plan while preserving control. When they retire, most employees sell the stock at stock market value.
Perhaps most importantly, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to distribute that tax hit instead of needing to pay taxes immediately. In many cases, ESOPs are a succession plan that keeps the most amount of money possible 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 exempt from federal income taxes
- Align the goals of employees and stockholders
- Present a higher value proposition when hiring
- Improve employee motivation and productivity
- Boost employee retention and loyalty
- Ease succession planning and business continuity
- Maintain control while organizing or easing into retirement
- Raise personal liquidity of owners, but still retain control of the company
- Preserve your business' legacy and culture
What About KSOPs?
A KSOP is a qualified plan that is a mix between an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can deposit their own money to obtain additional stock 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 more diverse investments. In fact, adding an ESOP or KSOP to a more traditional retirement plan allows you to attain the benefits of both. The experienced Swansea, IL ESOP advisors and retirement consultants of Correct Capital can help you find the right plans for your business.
What Our Swansea, 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 Swansea, IL ESOP advisory firm to partner with to reap the most benefits 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 have the option to reinvest the proceeds in different securities to postpone capital gains taxes on the sales, allowing 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 ensure you get the most tax benefit from your ESOP.
- Customize 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 challenge ourselves and our clients to get innovative with retirement plan offerings to optimize the benefits they offer. We'll assess your needs, assess various ESOP options, and suggest a customized ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it's a good idea, we may also suggest combining an ESOP with a 401(k) or different retirement plans to additionally augment benefits, yet retain 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 qualified retirement plans for their company. For clients looking at an ESOP, part of that means carrying out a feasibility analysis to ascertain if it's a viable option for your company. We'll examine:
- Cash flow, debts, and overall financial health
- Ownership structure to understand how it'll be affected by introducing an ESOP
- Employee demographics to understand what they need from their retirement plan
- 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 collaborate 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 Swansea, IL can help you establish your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the oversight of ESOPs. For example, when employees participating in an ESOP at a closely held employer receive company stock in an ESOP distribution, they have the right 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 seniority 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 progresses and matures, so will its implications for your company. ESOP advisors can plan for these changes and adapt to them in real time, facilitating your plan to stay viable, compliant, and profitable.
- Employee communication and education — Our ESOP advisors offer group meetings and individual consultations with your employees so they can get the most from your employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just acquire a portion of your company, but they'll feel like they're achieving ownership of their financial stability and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Swansea, IL
Correct Capital is an independent advisory firm that specializes in assisting business owners create retirement plans and succession plans for their companies. There are several factors we point to that make us unique from other investment advisory agencies in Swansea, IL, 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 range 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 needs of each and develop a plan that fulfills the requirements of both, as well as those of your stockholders.
- Our award-winning Swansea, 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 eight decades of combined experience, we pool our collective talents and insights to best serve each client uniquely.
- 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 establish long-term relationships with our clients founded on trust and the common goal of expanding your and your employees' monetary well-being.
Other services we offer in Swansea, 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 Swansea, IL Today
If you're interested in learning more about ESOPs or aspire to start the process of setting one up for your Swansea, IL business, get in touch with a Correct Capital ESOP advisor at this moment. Let us do what we do best so you can prioritize on what you value most: setting yourself, your business, and your employees up for achievement. Reach out with one of our Swansea, IL ESOP advisors now at 877-930-4015 or contact us online.
