What is a Keogh Plan?

A Keogh Plan is a specific type of retirement plan designed for self-employed individuals and unincorporated businesses. This type of plan allows these individuals to contribute a percentage of their income toward their retirement savings, providing them with a tax-advantaged means of saving for the future. The contributions made to a Keogh Plan can be deductible from taxable income, which can significantly benefit self-employed individuals who may not have access to employer-sponsored retirement options.

The aim of Keogh Plans is to encourage self-employed workers to save more for retirement, matching some of the benefits that employees receive through traditional employer-sponsored plans. Because they are particularly tailored for self-employed individuals, other options like insurance policies, government-funded programs, or health insurance plans do not apply, as they serve entirely different purposes in financial planning and health coverage.