Which types of plans are categorized under Keogh plans?

Keogh plans, also known as HR10 plans, are designed specifically for self-employed individuals and unincorporated businesses. They can take two primary forms: Defined Benefit plans and Defined Contribution plans.

The reason why Defined Benefit and Defined Contribution plans are the correct categorization under Keogh plans is rooted in their structural characteristics. Defined Contribution plans, such as profit-sharing plans or money purchase pension plans, allow the plan sponsor to make contributions to individual accounts. The amount of benefits a participant receives at retirement depends on the contributions made and the performance of the investments. On the other hand, Defined Benefit plans promise a predetermined retirement benefit, which is based on factors like salary history and years of service, and these are also permissible under the Keogh structure.

In contrast, the other options do not accurately reflect the nature of Keogh plans. Retirement and Health Savings, as an example, blend different types of accounts and do not specifically pertain to the retirement plan context. Life and disability insurance, while important in the realm of employee benefits, do not fall under the categorization of Keogh plans since they focus solely on retirement savings. Lastly, stating "Only Defined Benefit" fails to acknowledge the inclusion of Defined Contribution plans, which is a key aspect of