Contributions are generally tax-free until distributed. Keogh plans can be either defined benefit or defined contribution types. For defined contribution plans, money purchase pension plans and profit-sharing plans are available. A money purchase plan is an employer sponsored retirement plan that requires a specified employer contribution. If you are self-employed, you might refer to your money purchase pension plan as a Keogh plan.
Special limits apply to self-employed business owners.
Most individuals may make contributions towards their retirement without paying taxes on the money until it is withdrawn. If you participate in a pension plan, the amount of money you are allowed to deduct for contributions to your traditional IRA may be limited. You may set up an IRA with several types of organizations. Most banks, credit unions, mutual funds, stock brokerage firms and insurance companies offer IRAs that meet the IRS's criteria for tax-deferred products. Once established, you may make contributions at any time to your IRA through this organization, who becomes the trustee or administrator of the assets in that product.