Some of you may be contemplating going out to practice on your own, or have just recently done so. Perhaps you are nearing your goal of being invited into the partnership at your current firm. In any of these situations, you should know what a Keogh plan is and what it means for your retirement.
There is much confusion about exactly what a Keogh plan is. The Keogh plan was created in the early 1960s, named after a local politician, with the idea of removing the disparities that existed at the time between “regular” qualified retirement plans and those covering self-employed individuals. A Keogh plan is simply a qualified retirement plan, the sponsor of which is self-employed. For this purpose, a self-employed sponsor could be a Schedule C sole proprietorship, a partnership or a limited liability partnership (LLP). The plan covers both the self-employed individual, as well as all of the sponsor’s employees.
