Assignment 3

Question 1

Keogh Plan

Answer 1

• Retirement Plan for self‐employed individual

Question 2

SEP Requirements

Answer 2

• Simplified Employee Pension
• In writing
• Employee requirements
– Age 21
– Worked in 3 out of last 5
years
– Received at least $500 in 2007(index)
– Fully vested
• Held in IRA

Question 3

Keogh Contributions

Answer 3

• Contribution for self-employed owner is
based on:
Earned income (minus contribution to plan)
Less ½ of SECA

Max. of $225,000 in 2007
($245,000 in 2010)

Question 4

SIMPLE

Answer 4

• Savings Incentive Matching Plan for Employees
• Elective deferral limit – Same as 401(k)
• Catch‐up contributions
• Required employer matching contribution

Question 5

Solo 401(k) Plan

Answer 5

• Designed for business owner and spouse
• Greater contributions than a profit sharing
plan