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Keogh plans operate like the other tax-deferred retirement plans we've discussed, but are intended for employees of unincorporated businesses and self-employed individuals.
You can contribute up to 100 percent of your income to a Keogh plan, up to an annual maximum of $42,000.
As with the other plans, Keogh plans let your investment earnings grow tax-deferred until you withdraw them, and there are tax penalties for early withdrawal. Like the other plans, Keoghs are available for just about any kind of investment instrument, except precious metals or collectibles.
One last method of tax-deferred retirement savings we will discuss is the annuity.