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The Keogh plan is originally designed to benefit self-employed individuals who would like to have their own pension plan in preparation for the days of their retirement. These are also available to small industries or organizations that employ a maximum of ten well-compensated workers. With these, self-employed individuals have the opportunity to set the benefits that they will receive in the years to come. They would also have better chances of retiring at ease without needing to worry about their daily cost of living. Those who employ less than ten individuals are entitled to a specific design for this type of plan that is employer-sponsored.

Some people would mistake the Keogh plan for the 401K. These may have the same goal yet are different in a number of ways. Here, the individual will be required to pay for both halves of the contribution that is often shared by the employer and employee with the 401k plan. The American government has truly made a giant step to be able to provide equal opportunity for those who work for themselves. They have been able to think about these people’s futures as these individuals works day in and day out to earn a decent living. It is only fair to have these plans. People from this type of workforce pay their share of tax obligations and having the chance to save up for their retirement is a small way of getting something back. Individuals of this category are entitled to a maximum annual deductible of $49,000.00 or 20% (whichever is lower) of their gross annual income.