ESOP advisor in Tower Grove, MO. Employee stock ownership plans (ESOPs) are becoming a more and more well-liked retirement plan for employees in a variety of sectors in Tower Grove, MO. They offer business owners an opportunity to transition from their company while considerably reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Tower Grove, MO business owners can do alone. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in Tower Grove, MO and around the nation, develop tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're in search of an experienced financial partner in Tower Grove, MO who shares your goals of setting up your company and employees for enduring success, call Correct Capital at 314-930-4015, contact us online, or schedule an appointment with one of our financial advisors today.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged retirement plan where employees receive shares of the company they work for, rather than savings accounts or investments in other companies such as in a 401(k). ESOPs are fully funded by the employer, and often times shares offered to employees are not decision-making shares, meaning control of the company stays with ownership and other executives. They offer great incentives to employees while providing businesses with an enhanced value proposition in the hiring process, and allow business owners to set up a succession plan while retaining 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 spread out that tax hit instead of having to pay taxes at once. 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)
- Further tax deductions through contributions made to employees
- If the business is one day 100% owned as an S-Corp by the ESOP, it's not subject to federal income taxes
- Align the goals of employees and stockholders
- Present a higher value proposition when hiring
- Increase employee motivation and productivity
- Improve employee retention and loyalty
- Facilitate succession planning and business continuity
- Maintain control while preparing or easing into retirement
- Raise 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 similar type of plan that is a combination of an ESOP and a 401(k). Ownership shares are provided to employees as in an ESOP, employees can contribute their own money to acquire 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 the risk tolerance that comes with 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 Tower Grove, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
How Our Tower Grove, MO ESOP Advisors Can Help
Whether you're moving on from ownership of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Tower Grove, MO ESOP advisory firm in your corner 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 other securities to defer capital gains taxes on the sales, permitting you to keep more of the sales proceeds for different purposes. To defer capital gains taxes, your ESOP advisor can help you carry out 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 ensure you obtain the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll create and implement an ESOP suited specifically to you and your company. We like to challenge ourselves and our clients to get imaginative with retirement plan offerings to enhance the benefits they offer. We'll evaluate your needs, assess different 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 other retirement plans to additionally boost benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and collaborate with them to find the optimal tax-advantaged retirement plans for their company. For clients interested in an ESOP, part of that means performing a feasibility analysis to establish if it's a feasible 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 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 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, attorneys, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Tower Grove, MO 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 employee stock ownership plans. For instance, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the right to require the employer to redeem them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on how long they've worked there. 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 evolves and matures, so will its impact on your company. ESOP advisors can plan for these changes and adapt to them in real time, allowing your plan to stay feasible, compliant, and beneficial.
- Employee communication and education — Our ESOP advisors offer group meetings and personalized meetings with your employees so they can optimize the advantages from your employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just get a portion of your company, but they'll feel like they're obtaining ownership of their financial health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Tower Grove, 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 numerous factors we point to that make us unique from other financial advisory firms in Tower Grove, MO, and across 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 industries, including for construction companies and contractors. As we work with both businesses and individuals and families to support in setting up retirement plans, we're perfectly positioned to understand the demands of each and establish a plan that meets the necessities of both, as well as those of your stockholders.
- Our award-winning Tower Grove, MO 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 eight decades 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 morally bound to do what's in the optimal interest of you, your employees, and your company. We endeavor to forge long-term relationships with our clients founded on trust and the mutual goal of expanding your and your employees' financial prosperity.
Other services we offer in Tower Grove, 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 Tower Grove, MO Today
If you're interested in learning more about ESOPs or desire to initiate the process of setting one up for your Tower Grove, MO business, get in touch with a Correct Capital ESOP advisor today. 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 success. Get in touch with one of our Tower Grove, MO ESOP advisors today at 314-930-4015 or contact us online.