Quick Definition

A Keogh plan is a tax-deferred pension plan available to self-employed individuals or unincorporated businesses for retirement purposes.

Examples

• 1A freelance graphic designer sets up a Keogh plan to save for retirement, contributing a portion of her earnings each year.
• 2A small business owner establishes a Keogh plan to provide retirement benefits for himself and his employees, taking advantage of higher contribution limits.
• 3An independent consultant uses a Keogh plan to defer taxes on retirement savings, thereby reducing his taxable income each year.

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