Individual Retirement Account is one type of personal saving account which permit you to save the money for retirement and there are tax advantages also.
A Keogh is more complex and a type of retirement account for self employed business owners, partners, and their employees in a company.
Contributions: Individuals make IRA contributions into their own accounts. With a Keogh account, business make the contributions into employees’ accounts. Strict limits are situated on both types of accounts. Bit more limits are situated in a Keogh than in an IRA.
Investment decisions: The individuals decide where the funds are invested in both IRA and Keogh accounts. Popular choices can be bonds and stocks or a combination of these investing tools, mutual funds.
Tax-advantages of an IRA: After age of 59 ½ years old, whenever you withdraw funds from the IRA, you pay income taxes at that time whatever your tax rate. Directly money contributed to an IRA, reduce the amount of money you owe taxes on.
Tax-advantages of a Keogh plan: Individual personal tax situation is not impacted by Keogh contributions directly. For business contributions are deductible. Withdrawals are taxed as income to the individuals upon retirement.