The Wealth You’ve Built Has Rules Attached to It
Most ESOP participants understand, in a general way, that their account balance represents real wealth. What many do not fully understand is how that wealth becomes accessible — and how the decisions made in that transition can either compound the benefit or erode it significantly.
An ESOP is a qualified retirement plan, not a taxable investment account. Participants cannot simply call a broker and sell shares whenever they choose. Access is governed by plan rules, federal requirements, and an annual cycle that most participants encounter for the first time when a letter arrives in summer asking whether they want to elect diversification.
The sections below cover how that process works, what the most costly mistakes look like, and how to think about structuring retirement income once distributions begin.
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Video Transcript
Chapter 1: Introduction
4 seconds
Hey everyone, welcome to ESOP Radio.6 seconds
Our topic today is what happens after you’ve earned your ESOP wealth. What do you do with it?12 seconds
A lot of people out there listening to the show work for ESOP owned companies and accumulate meaningful wealth over the duration of their career.19 seconds
We see that in our client base.21 seconds
We’re excited to have a special guest today, Peter Newman who’s a founder of Peak Wealth Planning.Chapter 2: About Peter Newman and Peak Wealth Planning
30 seconds
Peter, welcome to ESOP Radio and give us a quick background on you.34 seconds
Your firm peak wealth planning and the work you do with both business owners and employees with ESOP account balances.41 seconds
Thank you. Trevor. I’m delighted to be here today.44 seconds
I’ve spent the last 12.5 years working with employee stock ownership plan participants on a number of very important topics.54 seconds
One is forecasting their retirement income, managing the diversification of their concentrated stock, as well as folks1 minute, 2 seconds
that have reviews of public companies, equity comp and managing that diversification and the financial planning of portfolios that go along with it1 minute, 10 seconds
so that people can transition into retirement.1 minute, 13 seconds
In addition, because many of these families, whether it’s a company owner or Esop participant, have built significant wealth.1 minute, 20 seconds
We do a lot of work on intergenerational tax planning and wealth transfer, and we’ve been doing this for over a dozen years.1 minute, 27 seconds
We also work closely with clients, teams, attorneys and CPAs, or help them get those teams in place if they don’t have it,1 minute, 35 seconds
to build proactive tax planning into the picture. Before I start a peak wealth.1 minute, 39 seconds
I worked in higher education, the University of Illinois system and I manage their endowments, which is best for a large pool of assets designed to pay income forever.1 minute, 50 seconds
And I bring that same fiduciary approach to the families we work with today.1 minute, 55 seconds
Before we dive in, I should just mention thank you for having me out here because I’m a financial advisor.Chapter 3: Educational Disclaimer
1 minute, 59 seconds
People always stop me at cocktail parties and ask me for advice.2 minutes, 2 seconds
But I should explain this is not individual financial advice. This is for education purposes only.2 minutes, 7 seconds
And I’m delighted again to be a guest on the Esop podcast.2 minutes, 11 seconds
But folks should really seek professional advice from their own CPA or financial advisor.2 minutes, 16 seconds
Good disclaimer they’re a theater, so you specialize in providing financial advice for what we’re going to call successful people who earn their wealth at an employee owned company.Chapter 4: ESOP Participants and Accumulated Wealth
2 minutes, 25 seconds
You’ve seen a lot of situations out there, obviously, and working for the university endowment. I mean, timing, right?2 minutes, 31 seconds
The returns to the payouts and, you know, and so on, very similar to what we deal with with Esop owned companies.2 minutes, 37 seconds
Employees work often for years at an employee owned company, accrue meaningful wealth.2 minutes, 43 seconds
You know, sometimes in the millions, you know, we see that I was looking at one of our clients and their top Esop balance was 15 million, right?2 minutes, 50 seconds
So, I mean, that’s that’s wealth that needs to be deployed somewhere, you know, once they take it out.2 minutes, 55 seconds
So what is one piece of advice that you wish every Esop participant heard ten years ago?Chapter 5: The Most Important Thing to Do Earlier
3 minutes, 2 seconds
I think a good thing to do is to take stock of what accounts you have your 41K, your Esop,3 minutes, 10 seconds
and maybe do it yourself, or get someone to help you forecast your retirement income.3 minutes, 15 seconds
The inputs that forecasts are, how much you’re saving each year, what the investments are, what the rate of return it’s it’s not a terribly difficult calculation,3 minutes, 23 seconds
but doing some forecasting 1015 years before a retirement, if you don’t like what your forecast shows, for example, shows3 minutes, 32 seconds
you can’t replace you cannot replace your income or retirement, you have time to adjust to doing a forecast two years before a retirement, and finding out3 minutes, 39 seconds
that you don’t have enough to meet your goals.3 minutes, 42 seconds
You might not have as much runway, as much ramp to adjust and make a changes.3 minutes, 47 seconds
And in addition to that, many folks have a partner or spouse.3 minutes, 51 seconds
So that forecast might also include what is not only what do I have, but what does my spouse have.3 minutes, 57 seconds
So I think doing some forecasting, even if it’s not super granular, but at a high level, is really important to do all the other pieces.4 minutes, 6 seconds
No one knows what’s going to happen with taxes, but when you do those forecast, you want to think about, well, my paycheck today is X,4 minutes, 14 seconds
usually after tax when it shows with my bank account, the company I worked for but trying to forecast what’s my after tax income going to look like in retirement.4 minutes, 22 seconds
Again, a little bit of art and science there, but at least thinking about taxes too early on might not hurt. So planning for retirement early.Chapter 6: When People Start Thinking About Retirement
4 minutes, 30 seconds
And that’s sage advice of course, the longer horizon you have, you know, the more chances there are that, hey, you’re going to meet your forecast or beat, right?4 minutes, 40 seconds
That would be a great goal to say, hey, let’s how do we beat, you know what we’re planning here? What age do you find that?4 minutes, 48 seconds
Because you talk with people of all ages, you know, and all Esop like, you know, account balances, you know, and so on. Right.4 minutes, 55 seconds
And what do you find, generally speaking, that people start paying attention to retirement and start zeroing in on what that calculation looks like,5 minutes, 3 seconds
what their number is that they need to retire.5 minutes, 6 seconds
Is it 20s, 30s, you know, 40s, 50s, you know, broad stroke.5 minutes, 11 seconds
You know what what age range, you know, defined here is an moment here that we need to start thinking about retirement. That’s an excellent question.5 minutes, 18 seconds
And you know it definitely. Yeah. That’s saying your mileage may vary.5 minutes, 22 seconds
However what I generally see is folks in their mid 50s tend to start thinking about it like, hey, what’s happening?5 minutes, 30 seconds
How are things? Look, oftentimes people have children.5 minutes, 33 seconds
Not always, but if they have kids, maybe the kids are in college or through college, and then the parents say, gee, what’s the next chapter look like?5 minutes, 42 seconds
We might want to start thinking about retirement.5 minutes, 44 seconds
So that’s one cohort I often see that might reach out to a company like ours or someone else for financial planning and do it themselves.5 minutes, 53 seconds
The other cohort I often see are people that are, you know, high achieving, high at hard workers or people that just grew up in a household where finances was actually talked about.6 minutes, 3 seconds
So I’ll often also see people and they’re usually in their late 30s that are early starters or super savers that are like, hey, what’s my future look like?6 minutes, 12 seconds
I really want to plan for my future.6 minutes, 14 seconds
It doesn’t mean people in their 40s don’t do this, but oftentimes the people that come to me head to one of those two categories. That’s what I typically see.6 minutes, 22 seconds
Once in a while, I’ll get I’ll talk to business owners in their mid 40s that have gotten their business up and going, and then the business of making money,6 minutes, 30 seconds
and they may not be esops, but I’ll come to me and say, hey, I got X, Y, and Z, what else do I need to think about?6 minutes, 36 seconds
So that’s typically what I see from a demographic perspective.6 minutes, 40 seconds
But to your earlier comment, it’s it’s never too early to start. And this just had an awareness.6 minutes, 45 seconds
Even if you just read a book or listen to a podcast about your future, your financial future, whether it’s my stuff or your stuff or anyone else’s.6 minutes, 52 seconds
So many Esop participants view their Esop count as their greatest financial asset.Chapter 7: Why Diversification Matters
6 minutes, 58 seconds
So of course that means concentration, right?7 minutes, 1 second
If you know the seesaw balance that is 90% of your total wealth, okay. That’s concentration, right? But it can be a good thing, right?7 minutes, 8 seconds
If the value is growing and so on.7 minutes, 11 seconds
But why is diversification so important from your perspective as a wealth advisor and fiduciary, coming in and helping7 minutes, 18 seconds
someone plan out their retirement goals, their future wealth? I’m really happy you brought this up.Chapter 8: What Diversification Actually Means
7 minutes, 26 seconds
Yeah, I have a saying that a concentration builds wealth and diversification protects wealth.7 minutes, 31 seconds
But where using this term diversification, I think we should explain what it means from the investment perspective and also from a lay person example.7 minutes, 40 seconds
So diversification of this in the way as investment professionals we think about it.7 minutes, 45 seconds
It’s typically selling a single company stock and then reinvesting the proceeds of that into multiple different assets.7 minutes, 54 seconds
And that could be a stock fund that maybe buys the biggest 500 companies in the US.7 minutes, 59 seconds
It might be a stock fund that buys every publicly traded company available in the globe, and both of those are readily available in a low cost.8 minutes, 7 seconds
It might mean selling a single stock, buying a stock fund and buying a bond fund, and also a real estate fund, depending on your goals.8 minutes, 15 seconds
But diversification or moving from one single investment to multiple investments, hopefully through a vehicle that’s simple to use and simple8 minutes, 23 seconds
to access, like for example, market index fund, well, what does that really mean in English? Right?8 minutes, 28 seconds
For folks that are non-investment folks, I like the vegetable garden.8 minutes, 31 seconds
We have a huge vegetable garden at our house.8 minutes, 34 seconds
A few years ago I planted all the different crops lettuce, tomatoes, cucumbers, peppers, squash, arugula,8 minutes, 43 seconds
eggplant and, you know, each year some things do well in the garden, some things maybe not so much.8 minutes, 48 seconds
And a few years ago we had a bumper crop like 75 butternut squash.8 minutes, 53 seconds
They were gigantic, the size of like, baseball bats. Literally. So and those keep all winter.8 minutes, 59 seconds
So it’s like October and we’re giving them away to neighbors.9 minutes, 1 second
We’re using them for Halloween decorations.9 minutes, 3 seconds
So fast forward on the next summer and we like squash.9 minutes, 6 seconds
We’re like, okay, well, we’ll plant squash again along with all these other crops.9 minutes, 10 seconds
While that second summer the squash, some fungus or bug came and like, wiped it out, I’m not sure what really happened,9 minutes, 17 seconds
but because I had planted all those other vegetables, we still had enough to eat.9 minutes, 22 seconds
So for like four months of the year, we didn’t really have to buy vegetables at the grocery because we’re crazy about a vegetable gardening, like doing it.9 minutes, 28 seconds
That’s diversification that I have a lot of crops I can still eat.9 minutes, 33 seconds
So if you don’t understand investments, think about vegetable gardening and your salad plate with lots of different vegetables.9 minutes, 39 seconds
So I guess the other analogy here you gave the garden in the farm example is eggs in one basket. Yeah. Don’t put all your eggs in one basket.9 minutes, 47 seconds
Right. So that’s that’s diversification.9 minutes, 50 seconds
And the reason it’s important is you may have built 5 million or 7 million or 10 million or $1 million of wealth9 minutes, 57 seconds
in your single stock account with your Esop.10 minutes
But the question is, how exposed, how much what proportion of that Esop represents your, you know, is that 50% of your total wealth?10 minutes, 8 seconds
Is it 10% of your total wealth is at 20.10 minutes, 10 seconds
And every person’s risk level of comfort is different.10 minutes, 15 seconds
But maybe doing some forecasting and saying, hey, if I diversified and sold some of the stock and we’re going to the mechanics here,10 minutes, 22 seconds
but if I sold some of it and put some of this money somewhere else, if for some reason something where I happen to my single stock10 minutes, 30 seconds
meaning the value went down, how affected would I be? And can I minimize some of that effect? And I’ll take a step back here.10 minutes, 36 seconds
Let’s think about diversification in the context of an Esop.Chapter 9: ESOP Diversification Rules: Ages, Amounts, and Payout Timelines
10 minutes, 40 seconds
So for all you listeners who are new to the Esop world, an Esop is a retirement plan. Know. So it’s not a current taxable account.10 minutes, 48 seconds
It’s not a county can basically tax, you know, like like you can with your own stocks and bonds that are invested.10 minutes, 54 seconds
But you know, in your fidelity or whatever. Right. It’s a qualified retirement plan.10 minutes, 58 seconds
So all the Esops do have diversification provisions in there.11 minutes, 1 second
So generally speaking you have to be in the Esop ten years and be at least 55, and then you can start diversifying out.11 minutes, 9 seconds
So that’s when speaking to someone like Peter makes a lot of sense at that point in time.11 minutes, 13 seconds
Also, just wealth advisory, overall planning that makes sense to planning early.11 minutes, 18 seconds
And then as you get closer to either leaving the company or retiring, and that’s another trigger for being able to cash out of the Esop and then do something with it,11 minutes, 26 seconds
roll it over into another investment, or take the cash and use it to pay, not a mortgage, you know, do something different, right?11 minutes, 36 seconds
So when we say diversification, in this case, it’s literally that taking your Esop money when you were able to and deploying it somewhere else.11 minutes, 44 seconds
Yeah.11 minutes, 45 seconds
And to add to it, it’s never said for folks that are new to Esops because we may have some listeners that are, most Esop participants11 minutes, 52 seconds
will receive a percentage of their salary every year of company stock in a tax deferred account, at no cost to the employee who is now an owner of the company.12 minutes, 2 seconds
But they can’t sell that stock usually until age 55.12 minutes, 7 seconds
And as Trevor said, they have to have at least ten years in the plan. Well, how much can they sell?12 minutes, 14 seconds
Most esops allow you to sell up to 25% of the shares you ever accumulated at age 55, and then an additional up to 50%.12 minutes, 23 seconds
So an additional 25% when you turn 60.12 minutes, 27 seconds
So at 60, you can sell up to half of the shares you’ve ever received.12 minutes, 30 seconds
And then what most plans say is that when you declare retirements, most of them pay out one fifth of your remaining balance a year over five years.12 minutes, 41 seconds
There’s some complicated math.12 minutes, 42 seconds
It’s not exactly one fifth, but for, for all intents and purposes, it’s one fifth of what’s remaining over five years.12 minutes, 48 seconds
Some Esop companies are more flush with cash and want to get people out of the plan quicker, so they might pay out.12 minutes, 54 seconds
Over three years I’ve even seen one year, but the most common payout I see is five years. Be aware of that plan.13 minutes, 1 second
Documents can actually extend that pay out longer than five years if you have very large balances, but five years is most common.13 minutes, 9 seconds
One other thing on the payout is keep in mind that there might be a timing gap between when you file paperwork and when you receive a check. So exactly.13 minutes, 18 seconds
And yeah, they can often be a 3060 days, something like that.13 minutes, 22 seconds
You know, from the time you actually receive the check.13 minutes, 25 seconds
So there’s definitely timing considerations there.Chapter 10: The Retirement Declaration Timing Gap
13 minutes, 27 seconds
So Peter, you’ve said before you and I did a webinar here a couple weeks back, that was a lot of fun on diversification and strategies13 minutes, 35 seconds
and giving us scenarios on different people at different points in their career. You know what they should do.13 minutes, 40 seconds
So you said before that wealth creation and wealth preservation are two different challenges. Can you explain? Absolutely no.Chapter 11: Wealth Creation vs. Wealth Preservation
13 minutes, 48 seconds
Wealth creation for, at least for our Esop participants, usually involves regular savings and investment over many years,13 minutes, 55 seconds
and you build up these balances here for one K in your Esop accounts.14 minutes
And that is usually hard work and concentrated activity.14 minutes, 4 seconds
Once you’ve built up some substantial wealth, it’s important to recognize that you want to preserve and protect that wealth.14 minutes, 11 seconds
Well, why would I bring that up? Now?14 minutes, 13 seconds
I have a friend that that hit a motorcyclist when she was younger and got her driver’s license, and that family got in a lawsuit.14 minutes, 22 seconds
Well, wealth can be lost so that instant buy a lawsuit or a car accident, maybe through no fault of your own.14 minutes, 27 seconds
In this case, the motorcyclist had pulled out in front of her and had a traffic violation, but it didn’t prevent her family from being sued.14 minutes, 35 seconds
So wealth preservation can involve multiple things. One is proper liability insurance.14 minutes, 40 seconds
Another piece of wealth preservation you’re moving into retirement, for example, is do you have good tax planning?14 minutes, 45 seconds
We all want to pay our fair share of taxes, but we don’t want to.14 minutes, 48 seconds
Right Uncle Sam or the state more money in a check than we absolutely need to.14 minutes, 53 seconds
And then the other component I believe, to wealth preservation is I’ve got a nest egg at retirement. Let’s just pretend it’s for $1 million.15 minutes, 2 seconds
There’s a rule of thumb that’s called the 4% rule that says you can withdraw roughly 4% of your account balance and probably never run out of money.15 minutes, 11 seconds
That’s not guaranteed, but it’s a rule of thumb.15 minutes, 14 seconds
So if you have $4 million saved, you could probably draw $160,000 in a year perpetually, and probably leave $4 million to your kids.15 minutes, 22 seconds
If your portfolio is well invested.15 minutes, 24 seconds
So if you have $4 million, you can draw $1 million a year.15 minutes, 27 seconds
You’re probably going to run out of money.15 minutes, 29 seconds
So there’s something some number in between 160,000 and 1 million a year.15 minutes, 34 seconds
You might be able to push that a little bit, but you can’t go crazy and take all your money out in one year because you want everything the following year.15 minutes, 40 seconds
So wealth preservation has a lot more moving parts, I feel like, than wealth accumulation, especially for Esop participants.15 minutes, 48 seconds
Wealth accumulation can kind of be on auto wealth preservation and preserving an income stream forever sometimes involves a little bit more, planning and some strategies and tactics.15 minutes, 59 seconds
Yeah.15 minutes, 59 seconds
That’s one interesting distinction with an Esop is that when you think wealth creation, right.16 minutes, 5 seconds
And it’s very high level, very simple example, basically you spend less than you make, right.16 minutes, 10 seconds
You know, that’s that’s a wealth creation, you know.16 minutes, 12 seconds
And of course, Esop comes in and is basically forced savings because the company is giving you shares.16 minutes, 19 seconds
They’re restricted, meaning you can’t just turn around and sell those shares in the open market. You get cash.16 minutes, 24 seconds
You have to wait till that trigger, which is often a long horizon.16 minutes, 28 seconds
So esops are, generally speaking, our wealth creators because of the long term nature and also the forced savings nature of them.16 minutes, 36 seconds
And, you know, and these compare, Esop owned company to, you know, we’re filming this one on June 16th, so space X just went public last Friday.16 minutes, 46 seconds
You know, I’m talking about the employees there.16 minutes, 48 seconds
You know, it was basically a hey, they got the stock grants, you know, and, accumulated huge amounts of wealth. Right.16 minutes, 55 seconds
And it was sort of for savings, you know, they were outside of the, secondary markets and so on.17 minutes
They weren’t able to to sell their shares. Right.17 minutes, 2 seconds
And they’re probably still subject to lock up periods and so on.17 minutes, 5 seconds
But so you generally see that, you know, for most employees who don’t have, you know, any sort of large inheritance,17 minutes, 12 seconds
you know, marital wealth, you know, etc., family wealth, the way to create wealth is to get long term equity at your employer.17 minutes, 21 seconds
Absolutely.17 minutes, 21 seconds
Long term equity is is one that we typically see.17 minutes, 24 seconds
And then outside of the Esop world, the other wealth creation activity I see folks, is just what I call super savers.17 minutes, 30 seconds
People that save, especially starting in their 30s, the they max out there for one K account savings.17 minutes, 37 seconds
Maybe they even do some, some IRA accounts.17 minutes, 39 seconds
And they’re just disciplined about it and they do it regularly.17 minutes, 42 seconds
You, you put the I think you use the word autopilot or automatic and automatic regular savings, whether on an Esop17 minutes, 49 seconds
or if you don’t work at a company, maybe your spouse doesn’t, you know, in a 401 K can really build that wealth.17 minutes, 56 seconds
But again, starting early, right.17 minutes, 58 seconds
If you if you’re 25 and you save about 600 bucks a month, you can have $1 million at 65. If you wait, you’re 35.18 minutes, 6 seconds
That’s about $900 a month.18 minutes, 8 seconds
If you wait year 45, it’s almost $2,000 a month.18 minutes, 12 seconds
And if you wait for a 55, it’s about $5,500 a month that you need to save to hit $1 million or 65. So starting early is really important.18 minutes, 21 seconds
And, you know, time value of money compounding return. Absolutely. So it’s very important.18 minutes, 26 seconds
Maybe we should we should because we’re talking about compounding.18 minutes, 30 seconds
You know, it’s important for folks to recognize most esops are really well-run companies and are they’re all rowing the same direction.18 minutes, 38 seconds
And the management, the employee is and incentives are aligned and have good returns. There are occasional outliers. Not every company is perfect.18 minutes, 46 seconds
And it’s important to remember that you’re working at an employee owned company where you’re building wealth as well with these stock grants.18 minutes, 56 seconds
So let’s pick on, this example from 2001, another one from 2002 and 2001.Chapter 12: Common Mistakes at Diversification Decision Time
19 minutes, 3 seconds
There was a company called Enron that was an energy company.19 minutes, 6 seconds
And that company, it wasn’t necessarily employee owned, but a lot of those folks had Enron stock in their four four, one K accounts.19 minutes, 14 seconds
It was very common for Enron people to have a lot of stock in there for one K.19 minutes, 18 seconds
That company got in trouble with some off balance. What was that?19 minutes, 22 seconds
The the smartest people in the room, you know, if you ever want to, get a book to read on a plane or whatever, you know, look, that one up, it talks about19 minutes, 29 seconds
the inside workings of, you know, how Enron did what they did. Yeah.19 minutes, 34 seconds
And it was 20,000 people lost their jobs and their retirement savings all, you know, all in one fell swoop.19 minutes, 39 seconds
And other examples that are notable are Eastman Kodak.19 minutes, 43 seconds
Eastman Kodak actually had a retirement stock plan. Worldcom.19 minutes, 47 seconds
Also Worldcom at one point handled half of all internet traffic, merged with MCI, and then went bust in 2002.19 minutes, 54 seconds
So it doesn’t mean that every company is perfect.19 minutes, 57 seconds
Again, most are really well run and are occasionally these outlier events that do occur.20 minutes, 5 seconds
And that’s why we talk about diversification and wealth. Preservation. Exactly.20 minutes, 10 seconds
In all companies, whether it’s the most well-run Esop company, whether it’s fortune 500, etc., they all have the same forces20 minutes, 18 seconds
market forces, technological changes, competition, you know, classic Swot analysis of strengths, weaknesses, opportunities, threats.20 minutes, 26 seconds
Right.20 minutes, 26 seconds
So if you find yourself having a sizable Esop Balaji them make sure that you’re cognizant of that.20 minutes, 32 seconds
You know hey be very objective in in that position. Right.20 minutes, 36 seconds
And the objective when you have the opportunity to diversify.20 minutes, 39 seconds
So let’s talk a bit about mistakes participants might make.20 minutes, 43 seconds
So so Peter, you seen a lot of scenarios out there.20 minutes, 46 seconds
Of course, you know through your many years doing this.20 minutes, 49 seconds
What mistakes do you see East participants make when evaluating their diversification opportunities.20 minutes, 55 seconds
Because opportunities come up really you get a a notification on the, the the website, or you get something in the mail that says,21 minutes, 3 seconds
hey, you want to diversify, you know, check this box, yes or no. And return it.21 minutes, 7 seconds
So, you know, that’s that’s what happens, you know.21 minutes, 10 seconds
So what mistakes do you see when people are evaluating that? Because it’s it’s a huge decision. Right.21 minutes, 15 seconds
And you can kick the can down the maybe no decision. Right. You know that’s totally something. You know no decision.21 minutes, 21 seconds
But another decision isn’t a decision that is. Sure. No, no it’s yeah.21 minutes, 28 seconds
So I think I think one mistake I see just a general is not thinking about your retirement timeline, not doing an income forecast21 minutes, 36 seconds
and not recognizing the concentration you have. Right.21 minutes, 40 seconds
Just ignoring it, ignoring all these factors.21 minutes, 43 seconds
You know, if we flip this on its head and say, should I diversify if I do a retirement income forecast with my retire timeline,21 minutes, 50 seconds
especially a 55, and it shows I can meet my income goal, and in particular if I can meet my income goal, if I take a little risk off the table, sell that single company stock.22 minutes, 1 second
If my Esop is more than half my nest egg, I should probably consider a diversify right?Chapter 13: The Tax Cost of Cashing Out Before 59½
22 minutes, 6 seconds
Just in case there’s some event that’s beyond the control of the company that could hurt my my single stock single stocks often22 minutes, 14 seconds
move around more in value than broader invested portfolios, but more specific mistakes I see.22 minutes, 22 seconds
I’ll see folks.22 minutes, 23 seconds
Now, maybe it’s not an estate, but it’s a decision to pay more to the IRS.22 minutes, 27 seconds
I have seen occasionally folks say I’m 56 and for whatever reason I need cash today22 minutes, 34 seconds
and I’ll take my diversification check of 250 or $500,000.22 minutes, 39 seconds
I’ll take my $500,000 diversification check and rather than move it to my tax deferred IRA, which I’m usually allowed to do,22 minutes, 47 seconds
the cash that check in my bank, well, all of a sudden this year, I’m paying Uncle Sam a 10% tax penalty, $50,000,22 minutes, 55 seconds
because I cash my check before 59 and half out of my tax deferred Esop account.23 minutes
And I’ve just pushed up my regular income from, say, $150,000 that year to 650,150, plus the $500,000 payout.23 minutes, 11 seconds
So not only did I pay a tax penalty, all of a sudden, probably the highest tax bracket at 750, 650, $650,000 of income.23 minutes, 20 seconds
One of the things people can do to avoid that mistake is think about, do I really need that cash today, or can I get that money23 minutes, 27 seconds
from somewhere else, either through planned savings or home equity?23 minutes, 31 seconds
I can I spread out that tax bill over many years by moving my diversification to an IRA.23 minutes, 37 seconds
So 10%, yeah, a 10% hit is I mean that’s that’s real.23 minutes, 42 seconds
And in this example, they just waited a few years, did roll it over to an IRA, then started taking the money after they had 59.5, you know, examined it.23 minutes, 52 seconds
And they have a couple more years of return, you know, as well in the market, you know, and so on.23 minutes, 57 seconds
We do see that, you know, across our client base.24 minutes, 1 second
One thing we do here at Menke, we help business owners go through the whole Esop, raise the capital and execute the transaction. And we do the ongoing administration.24 minutes, 9 seconds
So we have a large what’s called a third party administration team.24 minutes, 12 seconds
And, we have tremendous data on that side. We have nationwide clients.24 minutes, 16 seconds
We have right now 600, you know, counting all sizes, average is about 150 employees.24 minutes, 22 seconds
So, we have tremendous data throughout our 52 years in business.24 minutes, 25 seconds
And you do see human nature come in a bit here.24 minutes, 28 seconds
So some people, when they see they can get cash, they’re like, yes, I’ll take it. No matter what the consequence.24 minutes, 35 seconds
And so as you just pointed out others, it’s a much more calculated approach. Right.24 minutes, 39 seconds
So education though, you know in our opinion we’ll educate people, hey you do this. Yeah.24 minutes, 44 seconds
You’re going to pay this 10% penalty and put yourself in probably a much higher tax bracket as you pointed out. So it’s going to be a bad tax answer.24 minutes, 51 seconds
Probably a bad retirement answer to.24 minutes, 53 seconds
So unless you really need this cash, consider smarter alternatives. I knew is a good point.24 minutes, 59 seconds
Taking the cash today and not rolling it over to an IRA, or for one K on your eligible diversified 55 or 60 if you needed that money25 minutes, 7 seconds
for your retirement income stream down the road, which usually involves.25 minutes, 12 seconds
I’ve got a lot of money in A41K or an IRA, and I’m just going to take regular withdrawals. Now.25 minutes, 18 seconds
Maybe I’ve got 2 million and I’m going to draw out $1,000 a year from my accounts and keep those accounts invested. Well, I need that $1,000.25 minutes, 25 seconds
If I retire of 65, I might need money for the next 30 years till 95.25 minutes, 30 seconds
And who knows what’s going to happen to Social Security right now.25 minutes, 33 seconds
I don’t see Congress having the will to fix Social Security and that that may or may not be fully present.25 minutes, 40 seconds
You know, we could see a haircut on Social Security in six years.25 minutes, 43 seconds
Is there going to be Social Security for us? I I’m not really sure.25 minutes, 47 seconds
The other mistake I do see, and I did want to mention is sometimes see if we mentioned this, ignoring the decision and, you know,25 minutes, 55 seconds
I have a client I worked with when I started working with him, I still work with him.25 minutes, 58 seconds
I started with him about 12 years ago, and we opened the firm and his Esop balance.26 minutes, 3 seconds
In the five years before I met him, went from about $1.1 million down to about $400,000,26 minutes, 11 seconds
up to over $4 million in a five year period.26 minutes, 15 seconds
So imagine if he was turning 67 when that account balance dropped from 1.1 million to $400,000, he would have had to delay retirement.26 minutes, 25 seconds
And that’s for folks, especially if you run into a health concern which sometimes forces people into retirement.26 minutes, 30 seconds
Or maybe you don’t buy your spouse or partner runs into a health concern.26 minutes, 34 seconds
Or maybe you have to move across the country to take care of an aging parent.26 minutes, 37 seconds
You can’t do your job anymore because it’s not a remote job.26 minutes, 41 seconds
Now, there there’s certain well, just real quick there case that account balance was 1.1 and then it dropped significantly.26 minutes, 49 seconds
Do you remember the, what was going on at that company?26 minutes, 53 seconds
So the name of the company, they had done a large acquisition and taken out a lot of debt, so temporarily depressed the stock price.27 minutes, 1 second
And then they, they, they, they got they integrated the acquisition, they brought back another CEO.27 minutes, 7 seconds
They really did a great job growing the company so temporary. Right. So it wasn’t a no one did anything wrong.27 minutes, 14 seconds
The acquisition turned out to be additive to the portfolio of companies that that company owned, but that that really caused the stock price to fluctuate.27 minutes, 22 seconds
And there was actually a shareholder lawsuit over it. So interesting. Okay.27 minutes, 26 seconds
So they they basically took out dead, did some acquisitions, and it took a while for the synergies to take place for that to be reflected in the cash flow.27 minutes, 33 seconds
And, and this is one key thing, you know, to talk about Esop valuation.27 minutes, 38 seconds
It’s much different than in the public markets.27 minutes, 40 seconds
You know, where there’s a market, you know, you buy and sell, you know, every second the Nasdaq, Dow Jones, etc.27 minutes, 46 seconds
Esops are valued generally once a year and they all tie back to the cash flows.27 minutes, 51 seconds
The cash flows of the company supports the value, supports your Esop account balance and basically supports getting paid out.27 minutes, 58 seconds
So any time there’s an impact to cash flows, whether it’s positive, negative or neutral, you’re going to likely see that reflected28 minutes, 7 seconds
in the value that shows up on the account statement.28 minutes, 9 seconds
So Esop valuations go lock in step with cash flows.28 minutes, 15 seconds
You know, and this example here proves that. Absolutely.28 minutes, 17 seconds
And to add on to what Trevor says, sir just said, you know today’s interest rate environment interest rates look like they’re creeping up.28 minutes, 24 seconds
There’s some inflation whether you know we can argue about tariffs all day long. But there has been some inflation.28 minutes, 30 seconds
So we may see potentially a more muted stock price increases with higher inflation, the higher interest rates and also the valuation cycle.28 minutes, 39 seconds
Trevor Trevor mentioned most I’m sure not all of the esops I’m familiar with.28 minutes, 44 seconds
They typically will value their stock sometime in the spring.28 minutes, 47 seconds
And that share price gets told or revealed to the Esop plan participants usually around best, usually around June or July,28 minutes, 55 seconds
and then folks get a letter in the summer that says you’re eligible to sell back some shares. Do you want to sell back shares?29 minutes, 3 seconds
And if you do, do you want to check in your bit to put in your bank account? Do you want to roll up to an IRA?29 minutes, 8 seconds
And by the way, or what IRA, do you want to put it in and or do you want to put it in your 401?29 minutes, 13 seconds
Okay, so many times we get phone calls of people say, hey, should I do this?29 minutes, 17 seconds
B I don’t know how to create retirement income.29 minutes, 20 seconds
So we’ll say we’ll help you move it to an IRA, and then we’ll help you create the retirement income when you when you stop working.Chapter 14: Three-Bucket Asset Allocation Framework
29 minutes, 26 seconds
But that window, that timing that generally opens once a year.29 minutes, 30 seconds
So if you if you don’t do it this year, it’s not the end of the world. You can do it next year.29 minutes, 34 seconds
But you’ve made a conscious choice to wait a whole 12 months.29 minutes, 37 seconds
Like Trevor said before, you can’t just call up a broker and sell it in the open market today.29 minutes, 42 seconds
Similarly, at retirement age, because of that time cycle, depending on the plan year and when you declare29 minutes, 50 seconds
your retirement eligibility, if you declare retirement on January 1st of a new plan year for an Esop company, it could be 16 months before you get your first distribution.30 minutes, 1 second
That one fifth of a year we talked about before.30 minutes, 4 seconds
So it’s really important if you’re thinking about retiring from an Esop to understand the calendar of when distributions get paid out30 minutes, 12 seconds
and understand when you declare retirement, when does that start the clock and when do you actually get a check. So there’s a lot of moving parts here.30 minutes, 20 seconds
One of the things we try to tell folks to do is, hey, have a few years in cash anyway, just for good, prudent investing,30 minutes, 27 seconds
whether that’s on a Roth IRA or savings account.30 minutes, 30 seconds
So your first couple years of retirement, you might not be pulling money right out of the stock market.30 minutes, 34 seconds
And if you’ve got a gap in your Esop distribution, you can cover your expenses. Yeah. The timing is so important.30 minutes, 40 seconds
You know, a lot of people, they look at the statement and you know their head like, yeah, this is what I have.30 minutes, 46 seconds
I can tap at any time that Peter, as you pointed out, there’s a big timing consideration here.30 minutes, 51 seconds
And you don’t want to be caught surprised when you do retire and that there is that that delay.30 minutes, 57 seconds
Now you need to have a plan and, model out that cash inflow, you know, in that right period that it’s coming in. Exactly.31 minutes, 5 seconds
And for most folks who’ve done some diversification, then they may have some money in an IRA that they can access at any time,31 minutes, 13 seconds
especially if they’re after age, if they’re older than age 59.5, they don’t have that tax penalty.31 minutes, 18 seconds
They might pay regular income tax pulling it out of an IRA, but that money is accessible to those in the IRA.31 minutes, 24 seconds
The other thing that is really interesting to me, having done this for a long time, is the mechanics of withdrawing money to to cover retirement expenses.31 minutes, 34 seconds
A lot of folks are not comfortable doing that on their own.31 minutes, 37 seconds
It could be a little scary to have $3 million on one account, and knowing what to sell from that account to to fund your living expenses and how to do that every month.31 minutes, 48 seconds
And the other added component is when you work at a company, they take money out of your paycheck and pay taxes to the federal and state that you31 minutes, 56 seconds
the state that you live in when you retired.31 minutes, 58 seconds
You have to do that on your own with the help of an accountant or advisor.32 minutes, 2 seconds
We actually work with clients to forecast how much they’re going to pull out, and we send the money to the feds and the state for them so they don’t have to worry about it.32 minutes, 11 seconds
They still have to be accountable at the end of the year, and we work with them and their CPA to true it up and say, do you owe money on your taxes just like you do when you’re working?32 minutes, 19 seconds
We try to set a level set that during the year so they’re not surprised come April. Yeah.32 minutes, 24 seconds
So Peter, given today’s economic environment, are there particular diversification strategies or asset allocations that participants should be thinking about?32 minutes, 33 seconds
I know it’s a very dynamic environment.32 minutes, 36 seconds
You know, we had the tariffs, you know, last year.32 minutes, 38 seconds
Those are still going on at different percentages.32 minutes, 41 seconds
Let’s see obviously Iran gas, you know, if your gas inflation, you know, was 4.2%.32 minutes, 48 seconds
Now of course, I was saying the Strait of Hormuz will open any day now that might go, you know, inflation related to fuel cost, maybe we’ll get out.32 minutes, 56 seconds
But it’s a very dynamic environment. Right.32 minutes, 58 seconds
And also one to and has proven difficult to make any sort of long term planning moves in, you know, based on macro conditions.33 minutes, 6 seconds
So, you know, given that, you know, has that modified your advice and, you know, are there particular strategies, you know, that you’re deploying these days?33 minutes, 15 seconds
That’s a really good question, Trevor.33 minutes, 17 seconds
I’ve been a professional investor for institutions and managing people’s retirement assets.33 minutes, 23 seconds
But it’s combination of those for for 26 years.33 minutes, 25 seconds
The way I view that is, do you really want to think about your investments in three buckets? Cash for money? I’m going to need 1 or 3 years from now.33 minutes, 34 seconds
Maybe some income producing assets.33 minutes, 36 seconds
That might be a real estate fund that pays some dividends.33 minutes, 39 seconds
It might be a stock fund that pays some dividends, or it might be some bonds that pay regular interest income.33 minutes, 44 seconds
And I probably want to align more conservative bonds and less risky dividend paying stocks for money.33 minutes, 51 seconds
I’m going to need the four years following those first three years, and then everything else I’ll put in the bucket.33 minutes, 57 seconds
If I mentally bucket years 7 or 8 and beyond, I’m going to put in growth.34 minutes, 2 seconds
And for me, growth really is owning public market stocks of both international and U.S. companies that are, low cost funds.34 minutes, 10 seconds
And the growth you mentioned inflation, right? Everyone’s concerned about inflation.34 minutes, 15 seconds
You know, ten years ago I could buy a cup of coffee at Starbucks for 250. Today it’s like $5. So if I want to overcome that.34 minutes, 23 seconds
So when my cup of coffee in 12 years from now costs $9, I’ll probably just make it a home. Some frugal.34 minutes, 29 seconds
But if I do both at Starbucks and I got to buy Trevor Cup, an espresso machine. Exactly, exactly. But if I do go out to Starbucks.34 minutes, 36 seconds
So Trevor, I’m going to buy him a coffee, I probably wouldn’t have invested money that I’m going to buy that coffee with 12 years from now in the stock market, it’s not guaranteed to always go up.34 minutes, 47 seconds
But history has shown that stocks generally outpace inflation and have growth over and above inflation. You know, the last ten years of U.S.34 minutes, 56 seconds
stock returns have probably been over 10%.34 minutes, 58 seconds
International stocks haven’t done quite as well the last ten years, but there’s a lot of valuation data and a lot of published research35 minutes, 6 seconds
that says international stocks may outperform the US in the next ten years.35 minutes, 10 seconds
That may or may not be correct, but we’ve shifted our portfolios a little bit more towards international in the stock allocation for those longer35 minutes, 19 seconds
term growth needs, so that that is a long way of saying have conservative investments for bills, you’re going to pay it right away35 minutes, 27 seconds
and have more growth oriented stock investments for those you’re going to pay, you know, ten or so years from now.35 minutes, 34 seconds
And the reason, the reason why is if you own stocks, if I have $3 million in stocks, if this war on Iran’s power35 minutes, 42 seconds
spirals out of control and oil prices double that, our stock valuation, my $3 million portfolio could drop to 2 million.35 minutes, 50 seconds
So I don’t want to be freaking out and selling my stocks when they just drop by 33%.35 minutes, 54 seconds
I want to take my money from my savings account and pay my bill and wait for that market to recover, and that’s sometimes hard to do.36 minutes, 1 second
That’s why I thinking about these things in advance and having a plan or getting some professional help, is often better than having no plan. Absolutely. Yeah.36 minutes, 10 seconds
Having a plan is is definitely sage advice here.Chapter 15: Three Things to Remember
36 minutes, 13 seconds
So Peter, if someone listening today only remembers three things from our conversation, what would you want those three things to be?36 minutes, 20 seconds
The three things would be forecast your retirement income.36 minutes, 23 seconds
The second, which we didn’t really touch on too much today, but consider how your expenses might change in retirement.36 minutes, 29 seconds
You know, do you to have to pay health insurance for a few years before Medicare, for example? Is there a mortgage paid off? Right. That lowers one expense.36 minutes, 36 seconds
The health insurance might be higher and then protect your assets with proper insurance, right. Have some liability insurance. Do an insurance review.36 minutes, 44 seconds
Maybe you don’t need life insurance when you retire, so you substitute one insurance for the other.36 minutes, 49 seconds
And my bonus thing is spend time with the people you love and the people you care about, because all this money talk is really great.36 minutes, 55 seconds
But if you don’t get to do the things you enjoy and spend time with the family you love, it may not be all worth it.37 minutes
So I would really spend time with people you enjoy.37 minutes, 3 seconds
Awesome discussion and I love these four things.37 minutes, 6 seconds
Forecasting, income forecasting, retirement expenses.37 minutes, 9 seconds
Your example earlier today about the, the accident with the motorcycle, you know, and so on, umbrella policies are cheap.37 minutes, 17 seconds
Make sure you’re covered according to your your asset base there. Manage that risk. So great stuff. And of course spend time with loved ones.37 minutes, 24 seconds
That’s highly underrated. Yes.37 minutes, 27 seconds
And in our society we overlook that sometimes. Absolutely. Yeah. Otherwise what’s the point of it. All right.37 minutes, 34 seconds
So so Peter, if listeners want to learn more about you and peak wealth planning or connect with you directly, how do they do so?Chapter 16: How to Contact Peter Newman
37 minutes, 41 seconds
Feel free to go to our website.37 minutes, 43 seconds
PeakWealthPlanning.com peak wealth planning.com.37 minutes, 47 seconds
You can find me on LinkedIn, Peter Newman.37 minutes, 50 seconds
And if you go on YouTube and search for peak wealth planning, you can find our YouTube channel.37 minutes, 55 seconds
And I believe they’ll also be in the show notes today.37 minutes, 57 seconds
And Trevor, I’m really grateful for you having me on. And this is a lot of fun. I always enjoy our conversations.Chapter 17: Closing and ESOP Radio Resources
38 minutes, 4 seconds
Likewise, this is one of my favorite ones is retirement planning.38 minutes, 7 seconds
While planning, you know, and forecasting that out. It’s meaningful and it’s so important. And thanks again, Peter.38 minutes, 14 seconds
Thanks everyone for joining us today. Check out more episodes. These are radio.38 minutes, 19 seconds
Also check out our recent boot camp that’s up there. Covers.38 minutes, 22 seconds
We have ten episodes cover everything from beginning to end.38 minutes, 25 seconds
Basically what an Esop is and small bite sized segments.38 minutes, 28 seconds
Our Esop radio channel can be found on your favorite podcast app.38 minutes, 31 seconds
So that’s Apple, Spotify, YouTube, or on our site, Menke.com.38 minutes, 36 seconds
Again, I’m Trevor Gilmore, CEO of Menke Feel free to reach out to me. I post on LinkedIn. Name is Trevor Gilmore.38 minutes, 42 seconds
You know you can connect with me there or, shoot me an email. Thanks everyone. Have an awesome day!About Our Guest: Peter Newman, Peak Wealth Planning
Peter Newman, CFA is the founder of Peak Wealth Planning, a financial advisory firm that works with individuals who have built wealth through stock plan participation and business ownership. He specializes in retirement income planning, concentrated stock management, equity compensation, and multi-generational wealth transfer, and works closely with clients’ CPAs to build proactive tax planning into the process.
Before founding Peak Wealth, Peter managed the $700 million University of Illinois endowment, overseeing institutional investment strategy and portfolio management. He brings that same disciplined, fiduciary approach to the individuals and families he advises today.
How ESOP Diversification Works
The Age and Tenure Thresholds
Federal law requires ESOP plans to offer diversification rights to participants who meet two conditions: they must be at least 55 years old, and they must have at least ten years of participation in the plan. Once both conditions are satisfied, most plans allow participants to sell up to 25% of the shares they have ever accumulated. At age 60, participants can sell an additional 25% — meaning up to half of lifetime accumulated shares can be diversified before full retirement is declared.
When a participant retires or leaves the company, most plans begin paying out the remaining balance in installments — commonly one-fifth of the balance per year over five years, though some plans with higher cash reserves pay out over three years or even one. Plan documents can also extend that payout period for very large balances. These timelines are spelled out in the plan document and worth reviewing well before retirement.
The Annual Election Window
The diversification election window typically opens once per year. Most ESOP companies conduct their annual valuation in the spring, communicate the resulting share price to participants by summer, and then send a letter asking whether participants want to sell a portion of their shares and, if so, where to direct the proceeds: a taxable bank account, an IRA, or a 401(k).
That annual cycle has a practical implication: if a participant declines to diversify in a given year, the opportunity does not return until the following cycle. That is not a crisis, but it is a conscious choice to wait twelve months. Given that share valuations can fluctuate year to year based on company performance — as discussed later in this post — the timing of that election is worth deliberate consideration.
The Retirement Timing Gap
One point that surprises many participants is the gap between when they declare retirement and when they receive their first distribution. Depending on when a participant declares retirement relative to the plan year, that gap can be anywhere from 30 to 60 days on the short end to as long as 16 months in certain scenarios.
For participants who look at their account statement and expect funds to be immediately available upon retirement, this gap can create real pressure. The practical guidance from Peter Newman: build a separate cash reserve — whether in a Roth IRA, savings account, or other liquid vehicle — that can cover living expenses for the first year or two of retirement without requiring immediate draws from investment accounts or ESOP distributions.
The Most Costly Mistake: Cashing Out Instead of Rolling Over
When participants receive a diversification distribution, they typically have a choice: roll the proceeds into a tax-deferred IRA or 401(k), or take the cash directly.
Taking the cash has immediate, significant consequences. If a participant is under age 59½, the IRS imposes a 10% early withdrawal penalty on the full amount. A $500,000 diversification check becomes a $50,000 tax penalty before income taxes are even calculated. That same $500,000, added to a participant’s regular salary for the year, can push total taxable income into a substantially higher bracket than they would otherwise face.
In contrast, rolling the proceeds into an IRA preserves the tax-deferred status of the funds, avoids the penalty entirely, and allows the money to remain invested and growing until distributions begin. For participants who genuinely need liquidity for a specific purpose, the question to ask is whether that liquidity can be sourced elsewhere — from savings, home equity, or other accounts — before triggering a distribution event.
This is one area where consulting with a CPA or financial advisor in advance of a diversification election is particularly valuable. The math on early withdrawal is straightforward but the decision to take cash should be made with full awareness of the tax cost.
Wealth Creation Versus Wealth Preservation
For most ESOP participants, the wealth creation phase happens with relatively little active management. The company contributes shares annually at no cost to the employee, the account balance grows with company performance, and the participant’s primary job is to stay employed and let compounding work. As Peter Newman put it on the podcast, for ESOP participants, wealth accumulation can be largely on autopilot.
Wealth preservation is a different challenge. It involves:
Retirement income forecasting. Understanding whether accumulated balances can realistically replace pre-retirement income — accounting for taxes, Social Security, a spouse’s savings, and expected expenses — is a calculation worth doing 10 to 15 years before retirement, not two years out. Finding a shortfall early leaves time to adjust savings rates, spending, or retirement timing. Finding it late does not.
Liability protection. Newman’s example of a friend whose family faced a lawsuit following a car accident illustrates a risk that has nothing to do with investments: accumulated wealth can be reduced or eliminated through liability. Umbrella insurance policies are relatively inexpensive and provide a meaningful layer of protection. An insurance review should be part of any wealth preservation conversation.
Tax management in retirement. When a paycheck stops, so does automatic tax withholding. Retirees who draw from IRAs or taxable accounts must manage their own estimated tax payments or work with an advisor or CPA to ensure that federal and state obligations are met throughout the year — not just discovered at tax time.
Sustainable withdrawal rates. A commonly cited rule of thumb holds that withdrawing roughly 4% of a portfolio’s value annually allows that portfolio to sustain itself indefinitely under most historical market conditions. On a $4 million portfolio, that is approximately $160,000 per year. The figure is not guaranteed, and individual circumstances vary — but it provides a useful starting point for assessing whether accumulated savings are sufficient.
A Framework for Asset Allocation in Retirement
Peter Newman uses a three-bucket approach when thinking about how to invest retirement assets:
The first bucket holds cash or near-cash equivalents — money needed within the next one to three years. This is not invested in the market. It covers near-term living expenses and provides a buffer so that participants are not forced to sell investments at an inopportune time.
The second bucket holds income-producing assets — conservative bonds, dividend-paying stock funds, or real estate funds — intended for years four through six or seven of retirement. These are more conservative than pure growth assets but provide some return while protecting against short-term volatility.
The third bucket holds growth-oriented investments — diversified stock funds in U.S. and international markets — for money that will not be needed for seven or more years. Over long time horizons, broadly diversified equity portfolios have historically outpaced inflation. The risk of short-term volatility is more tolerable when the funds in question are not needed imminently.
This framework is designed to prevent the common mistake of selling growth assets at a loss simply because expenses arise and there is no liquid buffer to cover them.
More from Peter Newman
Peter publishes regular content on retirement planning, concentrated stock, and wealth management for ESOP participants and business owners. You can find his work on the Peak Wealth Planning YouTube channel and connect with him on LinkedIn.
Ready to talk through the ESOP process — whether you’re a business owner considering an ESOP transaction or an advisor working with ESOP participants?
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Related Resources
About ESOP Radio
ESOP Radio is the official ESOP podcast from Menke — where real stories of growth, succession, and long-term wealth building are told.
Hosted by Trevor Gilmore and Ben Spadt, the show features conversations and educational episodes designed to help business owners better understand employee ownership.
Disclaimer
This podcast is provided for educational purposes only and does not constitute legal, tax, investment, or fiduciary advice.
Phil DeDominicis is an ESOP strategist and M&A advisor who has guided 300+ companies through ESOP formations, financing, and transactions over 20+ years at Menke & Associates. He specializes in selling ESOP‑owned businesses to financial or strategic buyers and in helping ESOP companies acquire other businesses.
