details about the keogh plan

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I would be very thankful if anyone can give some details about the keogh plan,thanks

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Keogh or HR-10 plan is a qualified employer plan which is set up by a self-employed person. This plan can be established by partnerships or a sole proprietor.

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Hampton

A keogh plan can be either a defined benefit or defined contribution plan. The maximum amount of contribution is dependent on the plan you have. Predetermined retirement benefits are provided by a defined benefit plan whereas in a defined contribution plan benefits depend upon how much is contributed in the name of the employee. It is a tax deferred plan which allows all investment earnings to grow tax deferred until withdrawal of capital.

colin · Posted: Thu Feb 22, 2007 5:24 pm Post subject:

Hi Hampton,

Welcome to Mortgagefit forum.

Let me add some information to what others have mentioned about the plan.

While setting up the plan, to build its assets you have to decide how the plan's funds are to be arranged. Some of the ways the funds can be arranged are:

You can buy face-amount certificates from any insurance company. Such certificates are treated like annuity contracts.
You can establish a custodial account or a trust for investing the funds.
Such a custodial account or trust can buy an annuity contract from an insurance company.

A custodial account can be set up with a loan association, bank, credit union or any other person who can perform the duties of plan trustee.

If you would like to get more information on Keogh Plan then please go through this following IRS page - http://www.irs.gov/publications/p560/ch04.html

Colin

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