Define: Keogh Plan

A Keogh Plan is a type of retirement savings plan designed for self-employed individuals or small business owners. It allows them to contribute a portion of their income to a tax-deferred retirement account.

Self-employed individuals or small business owners who have earned income from self-employment are eligible to establish a Keogh Plan.

No, only self-employed individuals or small business owners can establish and contribute to a Keogh Plan. Employees are not eligible to participate.

The contribution limits for a Keogh Plan are determined by the IRS and may vary each year. As of 2021, the maximum contribution limit is $58,000 or 100% of the individual’s earned income, whichever is less.

Yes, contributions made to a Keogh Plan are generally tax-deductible. However, there are certain limitations and restrictions based on the individual’s income and the type of Keogh Plan.

Yes, you can take early withdrawals from a Keogh Plan. However, if you withdraw funds before the age of 59 ½, you may be subject to a 10% early withdrawal penalty in addition to regular income taxes.

Yes, you can rollover funds from a Keogh Plan to another eligible retirement account, such as an Individual Retirement Account (IRA) or another employer-sponsored retirement plan.

No, unlike some other retirement plans, you cannot borrow money from a Keogh Plan. It is not allowed under the IRS regulations.

Yes, if you have employees, you can still contribute to a Keogh Plan. However, you may be required to make contributions on behalf of eligible employees as well, subject to certain rules and limitations.

Yes, it is possible to convert a Keogh Plan into a different type of retirement plan, such as a Simplified Employee Pension (SEP) IRA or a Solo 401(k). However, it is important to consult with a financial advisor or tax professional to understand the implications and requirements of such a conversion.