KEOGH PLAN Meaning and
Definition
-
A Keogh plan is a tax-deferred retirement savings account available to self-employed individuals and unincorporated businesses, such as sole proprietors and partnerships, in the United States. It was named after Eugene Keogh, a representative from New York who sponsored the Keogh Act in 1962, which introduced this retirement saving option.
A Keogh plan functions similarly to a traditional Individual Retirement Account (IRA), allowing individuals to set aside money on a tax-deferred basis for their retirement. Contributions made to a Keogh plan are tax deductible, reducing the individual's taxable income for the year in which the contribution is made. This provides immediate tax benefits and allows the contributed funds to grow tax-free until withdrawals are made during retirement.
As with other retirement plans, funds accumulated in a Keogh plan can be invested in various financial instruments, such as mutual funds, stocks, bonds, and money market funds. The earnings generated by these investments are not subject to taxation until distributions or withdrawals occur in retirement.
One distinctive feature of a Keogh plan is that it allows for higher contribution limits than traditional IRAs, allowing self-employed individuals to save more for their retirement. However, like other retirement accounts, there are penalties for early withdrawals made before the age of 59½, excluding certain exceptions such as disability or death.
Overall, a Keogh plan offers self-employed individuals and unincorporated businesses a tax-efficient way to save for retirement, providing them with financial security in their later years.
Common Misspellings for KEOGH PLAN
- jeogh plan
- meogh plan
- leogh plan
- oeogh plan
- ieogh plan
- kwogh plan
- ksogh plan
- kdogh plan
- krogh plan
- k4ogh plan
- k3ogh plan
- keigh plan
- kekgh plan
- kelgh plan
- kepgh plan
- ke0gh plan
- ke9gh plan
- keofh plan
- keovh plan
- keobh plan
Etymology of KEOGH PLAN
The term "Keogh plan" is named after its creator, Eugene James Keogh. Keogh plans were established by the United States Congress in 1962 through the Self-Employed Individuals Tax Retirement Act, commonly known as the Keogh Act. Eugene J. Keogh, a United States representative from New York, sponsored and championed the legislation that allowed self-employed individuals to establish tax-deductible retirement plans. The plans were designed to provide retirement benefits to self-employed workers, including sole proprietors, partnerships, and unincorporated businesses. The term "Keogh plan" has since become synonymous with qualified retirement plans for self-employed individuals.
Similar spelling words for KEOGH PLAN
Infographic
Add the infographic to your website:
