Advanced English Dialogue for Business – Keogh plan

Listen to a Business English Dialogue About Keogh plan

Craig: Hey Paisley, have you heard about Keogh plans?

Paisley: Yes, I have. It’s a retirement savings plan for self-employed individuals and small businesses.

Craig: That’s right. Keogh plans allow contributors to make tax-deductible contributions, helping them save for retirement while reducing their taxable income.

Paisley: Are there different types of Keogh plans?

Craig: Yes, there are two main types: defined-contribution plans, where contributions are made by the employer and employees, and defined-benefit plans, where the employer promises a specific retirement benefit based on factors like salary and years of service.

Paisley: How do Keogh plans differ from other retirement plans?

Craig: Keogh plans are specifically designed for self-employed individuals and small businesses, whereas other retirement plans like 401(k)s are typically offered by larger employers to their employees.

Paisley: Can anyone contribute to a Keogh plan?

Craig: To contribute to a Keogh plan, you must have self-employment income or own a small business. However, there are contribution limits and eligibility requirements based on income and age.

Paisley: Are there any advantages to having a Keogh plan?

Craig: Yes, Keogh plans offer tax benefits, including tax-deferred growth on contributions and potential tax deductions for contributions made to the plan.

Paisley: What happens if someone wants to withdraw money from their Keogh plan before retirement?

Craig: Early withdrawals from Keogh plans may be subject to penalties and taxes, similar to other retirement plans. However, there are exceptions for certain circumstances like disability or financial hardship.

Paisley: Thanks for explaining, Craig. Keogh plans seem like a valuable option for self-employed individuals and small businesses.

Craig: You’re welcome, Paisley. They can indeed be a useful tool for retirement planning and tax management.