What retirement plan can a sole proprietor use, provided their employees are included?

A Keogh Pension Plan, also known as a HR10 plan, is specifically designed for self-employed individuals and sole proprietors, allowing them to contribute towards their retirement while also including their employees in the plan. This type of plan offers high contribution limits, enabling business owners to save a significant amount for retirement, and it can be either defined contribution or defined benefit in nature.

For a sole proprietor looking to provide retirement benefits to themselves and their employees, the Keogh Plan allows for a structured retirement savings vehicle that aligns with this objective. It includes certain tax advantages, such as tax-deductible contributions, which further incentivize saving for retirement.

While traditional and Roth IRAs are options for individual retirement savings, they do not provide the same opportunity for employer contributions or for including employees in the plan effectively as a Keogh Plan does. A 401(k) Plan is typically suited for businesses with multiple employees and can be quite complicated in terms of setup and administrative requirements compared to the Keogh option. Therefore, the Keogh Pension Plan stands out as the most appropriate solution for a sole proprietor who wants to include their employees in a retirement plan.