There are many retirement savings vehicles available to different types of workers, but not all retirement plans are created equal. This quiz will test your knowledge of Keogh plans, and what makes them different from 401(k), IRA and other pension plans.
What type of workers are Keogh plans designed for?
If a person works for himself as well as for another employer, how can he save for retirement?
only using a Keogh
only using an IRA
using both a Keogh and an IRA
When were Keogh plans first invented?
in the 1960s
in the early 1980s
What happened to Keogh plans in 2001?
They were altered to the degree that the word Keogh is no longer in the U.S. tax code.
They were outlawed.
They were expanded to include individuals who work for small businesses as well.
Who was Eugene Keogh?
the congressman who created the initial bill establishing these plans
the financial professional who first designed these plans
the lobbyist who pushed for these plans to be included in the U.S. tax code
At what point is the money you contribute to a Keogh plan taxable?
when you contribute it
when the money is paid out to you
Why do Keogh plans have higher contribution limits than traditional retirement plans have?
because those who use them contribute to them both as an employee and as an employer
because these plans are usually opened by older workers who need to make up for lost time
because self-employed people need more retirement assistance
What is the 25% contribution limit of a Keogh plan not as high as it seems?
Business expenses are removed before the limit is calculated.
Self-employed people earn less overall.
The contribution limit is only 25% in the first three years of self employment, and then drops to 20%.
Which of these people is ineligible to contribute to a personal Keogh plan?
someone who works for a corporation and volunteers for a small business that offers Keogh plans to its employees
someone who is a partner in a small business and provides some business services to the business
a musician who earns some money from an album she has recorded while still being employed full time at a large corporation
If you own a small business with employees, and you set up a Keogh plan, what are your requirements?
making the plan available to your employees as well
informing your employees in writing about the details of the plan and opening it to them
contributing to the plan if your employees decide to join
Approximately how much longer will life expectancy be in 2020 than it was in 1940?
What type of retirement plan is typically a defined contribution plan?
What is a drawback of using a profit-sharing plan for your Keogh contributions?
You can't contribute when your business doesn't earn a profit.
You can only contribute based on a portion of your income.
You have a lower contribution limit than you do with a money-purchase plan.
What type of people typically should opt for a defined-benefit Keogh plan?
older workers earning a high income
those who own multiple small businesses
people whose business income fluctuates greatly from year to year
At what age can you typically withdraw funds from your Keogh without paying an early withdrawal penalty?
Under what circumstances can you withdraw from your Keogh at 55 without a penalty?
if you close your business
if the plan's funds won't cover the defined benefit
if your company has grown and become incorporated
In what form do you receive retirement benefits from a Keogh plan?
it depends on the specific plan
Which of these retirement plans has the highest contribution limit?
What is the latest that you can begin receiving distribution payments from your Keogh?
What must you do if your Keogh exceeds $100,000 in value?