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Burlington Stores Employees: Smarter Ways to Manage Taxes on Appreciated Stock

Healthcare Provider Update: Healthcare Provider for Burlington Stores Burlington Stores, Inc. provides healthcare coverage to its employees through a variety of plans, most notably through BlueCross BlueShield (BCBS). This offers employees access to a broad network of healthcare professionals and facilities. Potential Healthcare Cost Increases in 2026 As we look toward 2026, Burlington Stores and its employees may face significant increases in healthcare costs, driven primarily by record hikes in Affordable Care Act (ACA) premiums. States are reporting increases as high as 66% for certain ACA plans, with many individuals potentially seeing their out-of-pocket premiums rise by over 75% if enhanced federal subsidies are not extended. Factors contributing to these escalating costs include rising medical inflation, increased hospital and prescription drug expenses, and the anticipated expiration of enhanced subsidies. Consequently, employers may need to rethink their healthcare strategies, as shifting more costs to employees becomes a likely strategy in response to a challenging economic landscape. Click here to learn more

'Burlington Stores employees with concentrated stock positions may benefit from thoughtful tax planning that allows for tax deferral while balancing liquidity, compliance, and long-term compounding,' Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'Burlington Stores employees who hold highly-appreciated stock may want to consider tax-efficient strategies that help mitigate their liabilities while aligning with their overall retirement goals,' Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How taxes can affect investment returns, particularly on concentrated stock positions.
Exchange funds and options-based strategies as methods for tax deferral and diversification.
Alternative planning techniques outside ETFs, including charitable trusts and gifting strategies.

By Carlos Hernandez, Wealth Enhancement advisor

When it comes to driving portfolio returns, many investors aim to keep management fees low by investing in low-cost index funds and exchange-traded funds (ETFs). While fees matter, however, the real culprit for lower-than-anticipated performance is taxes. ¹

Wealth Enhancement advisor Carlos Hernandez explains: 'By losing less to taxes each year, investors have access to more capital that can continue to compound over time. This makes tax deferral an important part of an effective financial plan.' Burlington Stores employees looking for long-term growth strategies could benefit by understanding how to better manage their investment tax burdens.

Trade Money

One area where taxes can take a toll is on the sale of company stock or other concentrated investment positions. Burlington Stores professionals looking to diversify could face significant capital gains taxes on an outright sale. One way to diversify without triggering immediate capital gains is through exchange funds. By contributing their highy-appreciated stock to a pooled fund, investors can trade their concentrated holdings for shares in a diverse basket of securities. This method can be used by Burlington Stores employees who want to diversify while postponing taxable events.

Although this method allows for tax deferral, it also requires investors to hold the exchange fund for a period of time, typically seven years. ² This could create a challenge for investors who require liquidity. Additionally, these funds are often exclusively accessible to wealthy, accredited investors—something Burlington Stores executives should carefully evaluate.

Funds Based on Options

Another way to mitigate taxes on the sale of highly-appreciated stock is by using options contracts. The idea is to hedge risk with put options while covering the cost of those puts by selling call options—a strategy called 'collaring'. From there, the strategy reverses, with investors selling put options and using the proceeds to buy call option on an equity or bond index. ³ If managed effectively, this helps to diversify a concentrated portfolio while still maintaining liquidity.

Given the complexity of this strategy, meticulous planning is necessary. It's generally recommended that investors work with an experienced financial advisor before pursuing this approach.

Things to Be Aware of

Although these strategies can be beneficial for Burlington Stores employees who hold highly-appreciated stock, caution is recommended. There are costs associated with these approaches, and potential liquidity risks. Additionally, the IRS may eventually contest such arrangements because their tax status has not been thoroughly examined—something Burlington Stores retirees should keep top of mind.

'Tax drag reduction strategies can be effective, but they must be assessed through the lens of risk, liquidity, cost, and compliance,' warns Carlos Hernandez. What is appealing in theory must hold up to inspection in the real world.

Alternative Strategies

Although they show promise, investors with highly-appreciated stock or those looking to postpone gains have other alternatives besides exchange funds or options. Other tactics could include:

- Prepaid variable forwards (subject to IRS regulations, contracts to sell at predetermined terms in the future).
- Charitable remainder trusts (CRTs), which allow investors to donate appreciated stock to a charitable trust and receive a stream of regular income in return.
- Donor-advised funds (DAFs), which provide investors with a tax deduction for the fair market value of the appreciated stock they donate.
- Other gifting techniques, such as direct donations to charity or family.
Each has its own set of guidelines, advantages, and disadvantages. To limit unnecessary taxes or violating the constructive sale regulations, careful planning is necessary for Burlington Stores professionals managing complex portfolios.

The Bottom Line

Although the movement to mitigate the tax burden on investments is not new, the instruments are changing. Both exchange funds and options-based structures offer investors a way to manage tax liabilities, especially for Burlington Stores employees who hold highly-appreciated stock.

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In the end, taxes are unavoidable. However, with the correct set of instruments, they can be controlled and postponed. 'The real value comes from aligning tax strategy with investment strategy,' summarizes Carlos Hernandez.

Sources:

1. BlackRock Advisor Center. ' Investing for After-Tax Returns ,' 2025.

2. Kiplinger. ' Four Clever and Tax-Efficient Ways to Ditch Concentrated Stock Holdings ,' by Robert Waskiewicz. Sep. 11, 2025.

3. Financial Planning Association. ' Tax-Efficient Ways to Diversify Concentrated Stock Positions ,' by Peter Lazaroff. Oct. 2024.

What type of retirement plan does Burlington Stores offer to its employees?

Burlington Stores offers a 401(k) retirement savings plan to its employees.

Does Burlington Stores match employee contributions to the 401(k) plan?

Yes, Burlington Stores provides a matching contribution to employee contributions made to the 401(k) plan, subject to certain limits.

What is the eligibility requirement for Burlington Stores' 401(k) plan?

Employees of Burlington Stores are eligible to participate in the 401(k) plan after completing a specified period of service, typically 30 days.

How can Burlington Stores employees enroll in the 401(k) plan?

Burlington Stores employees can enroll in the 401(k) plan through the company’s benefits portal or by contacting the HR department for assistance.

What investment options are available in the Burlington Stores 401(k) plan?

The Burlington Stores 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

Can Burlington Stores employees change their contribution percentage to the 401(k) plan?

Yes, employees at Burlington Stores can change their contribution percentage at any time throughout the year.

Is there a vesting schedule for the employer match in Burlington Stores' 401(k) plan?

Yes, Burlington Stores has a vesting schedule for the employer match, which means employees must work for a certain period before they fully own the matched contributions.

What is the maximum contribution limit for Burlington Stores employees participating in the 401(k) plan?

The maximum contribution limit for Burlington Stores employees is determined by the IRS and may change annually; employees should check the current limit each year.

Does Burlington Stores offer a loan option against the 401(k) savings plan?

Yes, Burlington Stores allows employees to take loans against their 401(k) savings plan, subject to specific terms and conditions.

Can Burlington Stores employees withdraw funds from their 401(k) plan while still employed?

Generally, Burlington Stores employees cannot withdraw funds from their 401(k) plan while still employed, except under specific circumstances such as financial hardship.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Burlington Stores announced a restructuring plan that includes a significant reduction in workforce and the closure of several underperforming locations. The company also plans to make changes to employee benefits, including adjustments to health insurance coverage and retirement plan contributions.

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For more information you can reach the plan administrator for Burlington Stores at 2006 Route 130 North Burlington, NJ 8016; or by calling them at +1 609-387-7800.