Questions:

• What is a qualified retirement plan?
• Why are 401(k) plans so popular?
• What is a Keogh plan?
• What does it mean to be "vested" in my retirement plan?
• Is an IRA a retirement plan?
• Can people who work for a company and own their own business have a retirement plan both at work and through their small business?
• Is my retirement plan protected from creditors?

Answer:

What is a Keogh plan?

A Keogh plan is a qualified plan for self-employed individuals. The term Keogh is not a tax term, and you won't find any reference to it in the Tax Code. It's just a bit of retirement planning jargon that refers to the special restrictions placed on qualified plans when they are established by self-employed individuals.

The most onerous restriction is the following: Contributions to retirement plans are often determined by taking a percentage of compensation, but compensation for self-employed individuals is defined differently than it is for employees of corporations. The revised definition often produces a lower contribution limit for a Keogh.