Keogh Plan
Keogh Plans are a type of retirement plan for self-employed individuals and small businesses in the United States. Like other investment plans, a Keogh is a private retirement plan that is meant to supplement pension and Social Security.
Self employed Americans can contribute to a Keogh Plan even if they are self employed on a part time basis. If an individual runs more than one business, they need to set up a Keogh plans for all of them…and must make contributions to all of them.
There are some restrictions. Income earned overseas is not considered self-employment income. An inactive owner in a business is also excluded from contributing to a Keogh plan.
Contributions to Keogh retirement plans are tax-deferred, meaning the earnings grow tax-free until withdrawn. But the main benefit of a Keogh plan is that it has higher contribution limits, and is best suited for high income earners.
