NOTE: Effective December 31, 2012, TIAA-CREF no longer issues new Keogh employer plans. If you already have a TIAA-CREF Keogh, you may continue to add employees to the existing plan.
TIAA-CREF Keoghs are tax-deferred retirement plans for self-employed individuals and their employees. TIAA-CREF issued two types of Keogh plans — Profit Sharing and Money Purchase.
Profit Sharing and Money Purchase Keogh differ in these ways:
TIAA-CREF has no front load or surrender charges on Keogh contracts. Although we don't expect to impose service charges on these plans, we reserve the right to do so in the future.
If you’re self-employed and the Keogh is your only retirement plan, the contribution limit for 2013 is $51,000 or 100% or eligible compensation, whichever is less. In 2014, the contribution limit is $52,000. The maximum deductible contribution is 25% of eligible compensation. Your tax advisor can assist you in calculating your maximum deduction.
If you participate in both a 403(b) and a Keogh plan, then the contribution made to both plans cannot exceed $51,000 in 2013 and $52,000 in 2014, or 100% of eligible compensation.
Contribution limits for the qualified plan and the Keogh are calculated separately. The maximum contribution to each plan can be $51,000 in 2013 and $52,000 in 2014, or 100% of eligible compensation, whichever is less for the tax year. Since the contribution limits are calculated independently, your potential maximum combined contribution amount can be as high as $104,000 in 2014. Your tax advisor can assist you in calculating your maximum contribution limits.
You can get in-service cash withdrawals only from a profit-sharing Keogh plan. The employer must elect this option in the prototype. In-service cash withdrawals are not available from a money-purchase Keogh plan.
You make your contributions before taxes, which reduces your taxable salary. Both the contributions and earnings grow tax-deferred until they are withdrawn. If you take money out of your Keogh plan before age 59½, it will be subject to regular income tax and a 10% early distribution penalty.
Find out if you are eligible for a TIAA-CREF Keogh retirement account.
The tax information in this article is not intended to be used, and cannot be used, to avoid possible tax penalties. It was written to promote the products and services the article describes. Neither TIAA-CREF nor its affiliates offer tax advice. Taxpayers should consult an independent tax advisor for advice based on their own particular circumstances.
Keogh annuity contract form series G1350. Not available in all states.
TIAA-CREF products may be subject to market and other risk factors. See the applicable product literature, or visit www.tiaa-cref.org for details.
Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY.TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products.
Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity and may lose value.