Keogh plan

[1] Named for U.S. Representative Eugene James Keogh of New York, they are sometimes called HR10 plans.

[2][3] A person with a Keogh plan can also contribute to an IRA (traditional or Roth).

They've been largely replaced by SEP IRAs, which have the same contribution limits but much less paperwork.

Penalties may apply for making withdrawals from a Keogh plan before the account holder turns 59½.

The main benefit of a Keogh plan versus other plans (Keogh's high contribution limit) is lost in individuals who do not make a high level of income.

Scenario #3 – An entrepreneur who owns a small marketing firm makes $400,000 per year.

She wishes to contribute as much as possible to a retirement plan in order to minimize her current taxes.