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Keogh Plan
Term category: Retirement
In 10 words or less: A tax-deferred retirement option for self-employed people.

Definition: A retirement plan set up by a self-employed individual for himself and his employees (if applicable). The money grows tax-deferred.

More Details: Eligible persons can contribute up to 25% of earned income up to $200,000 per year.  Total contributions cannot exceed $40,000/year.  The money grows tax free until the retiree makes qualified withdrawals after age 59 1/2.

StockJargon Advice: Keogh plans are like 401(k) plans for self-employed people. They give the person a tax benefit for saving for their retirement.  Because tax benefits are good, we encourage small business owners to take advantage of these.

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