What is a Keogh plan?

A Keogh plan is a retirement plan for those who are self-employed or own small, non-incorporated businesses. It's like a 401k in that the contributions paid into the plan are tax deductible. However, those contributing to a Keogh plan must be part of a sole proprietorship, partnership, or limited liability company. Those who own larger businesses or who are independent contractors would not meet the requirements for such a plan.

Those who qualify for a Keogh plan have various options. They can set up a contribution plan and determine the parameters and contributions that go into the plan. There is the money purchase plan, and this allows contributors to contribute a fixed percentage of their income into the plan.