Keogh Plan / HR-10 Plan
Keogh Plan / HR-10 Plan - Rollover:
● Distributions from a Keogh plan may be rolled over into another Keogh plan or into other types of retirement plans such as IRAs or other qualified plans [401k]. ● Must be completed within 60 days.
Keogh Plan / HR-10 Plan -
● is a qualified, tax-deferred retirement plan for self-employed individuals that can be set up as a defined contribution plan [like a profit-sharing plan] or a defined benefit plan. ● Are more complex to set up than SEPs but are advantageous as they allow for higher contribution limits.
Keogh Plan / HR-10 Plan - Plan Designated for:
Self-employed individuals with earnings from self-employment including sole proprietorships, partnerships & unincorporated entities.
Keogh Plan / HR-10 Plan - Allowed Investments:
can invest in stocks, bonds [including Treasury Bonds], Mutual Funds, Unit Investment Trusts & Variable Annuities.
Keogh Plan / HR-10 Plan - Contribution Info. : Contributions may be made annually up to specified limits:
● the pre-tax contribution is limited to the lesser of 100% of earned income or $49,000 ● the plan may be designed to provide an annual retirement benefit of the lesser of $195,000 or 100% of the average compensation for your 3 highest years. ● Contributions & earnings are tax-deferred while in the plan
Keogh Plan / HR-10 Plan - Eligibility
Recipients of income from self-employment & their full-time employees who meet certain requirements [work 1,000 hours pr year, are 21 years of age or older, & have at least 1 year of service to the company] are eligible.
Keogh Plan / HR-10 Plan - Distributions - ● May begin at age 59 1/2. Funds withdrawn before age 59 1/2 are subject to a 10% penalty tax except in the case of death or permanent disability.
● Are mandatory by age 70 1/2. Required minimum distributions [RMDs] must begin no later than April 1st following the calendar year in which the owner reaches age 70 1/2. Late distributions are subject to a 50% penalty tax on the insufficient distributions. ● Distributions to plan holder are taxable as ordinary income.