Which retirement plan is specifically designed for self-employed individuals?

Keogh plans, also known as HR-10 plans, are specifically designed to provide retirement benefits for self-employed individuals and their employees. This type of plan allows self-employed persons to contribute a larger amount of their income towards retirement savings compared to traditional IRA plans, which have lower contribution limits.

One of the key features of Keogh plans is their flexibility in terms of contribution limits and the types of investments allowed, which can help self-employed individuals tailor their retirement plans to better suit their financial needs and goals. The contributions made to Keogh plans are tax-deductible, further incentivizing self-employed individuals to save for retirement.

In contrast, while 401(k) plans and IRAs can also be available to self-employed individuals, they are more commonly associated with employers and employees within traditional corporate structures. Pension plans are generally established by employers to provide fixed, pre-established benefits to employees upon retirement, which do not typically apply to self-employed persons.