keogh plan
Definition
Noun: A Keogh plan is a type of tax-deferred retirement savings plan designed specifically for self-employed individuals or for employees of unincorporated businesses (like sole proprietorships or partnerships). Contributions to the plan are often tax-deductible, and investment earnings grow tax-deferred until withdrawal during retirement.
Usage
A Keogh plan is established by a self-employed person or a business owner to save for retirement while receiving specific tax advantages. It is a formal retirement account.
Examples
- The consultant set up a Keogh plan to save for retirement and reduce her current taxable income.
- Contributions to his Keogh plan are invested and will not be taxed until he starts making withdrawals.
- As a self-employed architect, she compared a Keogh plan to other retirement options like a SEP-IRA.
Advanced Usage
- Qualified plan: A Keogh plan is a type of qualified retirement plan, meaning it meets specific Internal Revenue Service (IRS) requirements for favorable tax treatment.
- Defined-benefit vs. Defined-contribution: Keogh plans can be structured as either defined-benefit plans (promising a specific payout at retirement) or defined-contribution plans (where the payout depends on contribution and investment performance).
Variants and Related Words
- HR-10 plan: This is an older, synonymous term for a Keogh plan, named after the House of Representatives bill that created it.
- Self-employed pension plan: A descriptive term for a Keogh plan.
- Solo 401(k): A different type of retirement plan for self-employed individuals with no employees (other than a spouse). It is often compared to a Keogh plan.
- SEP-IRA (Simplified Employee Pension IRA): Another retirement plan option for self-employed persons and small businesses, typically easier to administer than a Keogh plan.
Synonyms
- Self-employed retirement plan
- Tax-deferred pension plan for the self-employed
Notes
- The term "Keogh plan" is less common today, as many of its features are now available in other plans like the Solo 401(k). However, some existing plans still operate under this structure.
- Rules governing contribution limits and eligibility for Keogh plans are complex and subject to IRS regulations.
Noun
-
a tax-deferred pension plan for employees of unincorporated businesses or for self-employed persons
Khám phá thêm
Các từ liên quan
Từ đồng nghĩa
