Keogh Plan

A Keogh plan is a qualified retirement plan that allows self-employed individuals and small business owners to save for retirement. Keogh plans are similar to 401(k) plans, but they are designed for self-employed individuals and small businesses. Keogh plans offer a number of tax advantages, including tax-deductible contributions, tax-deferred growth, and the ability to roll over funds to an IRA.

There are two types of Keogh plans: defined benefit plans and defined contribution plans. Defined benefit plans promise a specific benefit at retirement, such as a monthly pension. Defined contribution plans allow employees to contribute a certain amount of money each year, and the employer matches a portion of those contributions.

The contribution limits for Keogh plans are higher than the contribution limits for IRAs. In 2023, the maximum contribution for a defined contribution Keogh plan is $61,000. The maximum contribution for a defined benefit Keogh plan is the lesser of 25% of self-employed income or $290,000.

Keogh plans are a great way for self-employed individuals and small business owners to save for retirement. They offer a number of tax advantages and can help you build a nest egg for your golden years.

Here are some additional details about Keogh plans:

* Keogh plans are subject to annual reporting requirements.
* Keogh plans must be established by a written plan document.
* Keogh plans must be funded with cash or other eligible investments.
* Keogh plans must be maintained for at least five years.

If you are self-employed or own a small business, a Keogh plan may be a good option for you. Keogh plans offer a number of tax advantages and can help you build a nest egg for your retirement.