Keogh plan

For the name, see Kehoe.Keogh plans are full fledged pension plans for self employed people. They are sometimes called HR10 plans and are not Individual Retirement Accounts (IRA). Because they are full fledged pensions, there is a Keogh for every employer sponsored pension plan design. You could have a traditional defined benefit plan with IBM and so you can do so for a single person self-employed Keogh. Likewise a large company could have a defined contribution plan like a 401(k) or 401(a) money purchase plan; likewise HR 10 plans could be set up as defined contribution plans for self employed earners as well. The only difference between these plans for self-employed workers and employer sponsored plans is the calculation of the deductible limit. This occurs merely because the employer pays its share of the FICA or Social Security tax while self-employed people must pay both the employee and the employer portion of FICA. For this reason, the net income under HR10 plans is adjusted to remove the double FICA.
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Noun
1. a tax-deferred pension plan for employees of unincorporated businesses or for self-employed persons
(hypernym) pension plan, pension account, retirement plan, retirement savings plan, retirement savings account, retirement account, retirement program

A type of pension account in which taxes are deferred. The plan targets persons who are self-employed.