TIAA-CREF Keoghs are tax-deferred retirement plans for self-employed individuals and their employees. TIAA-CREF offers two types of Keogh plans — Profit Sharing and Money Purchase.
They differ in several ways, including:
- The amount that can be contributed each year
- Whether annual contributions are required
- Triggering events that permit withdrawals
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.
The nominal contribution amount is $100 for self-employed individual accounts. A partnership could simply place the $100 contribution in the account of one partner.
If you're self-employed and the Keogh is your only retirement plan, the contribution limit is $49,000 or 100% of eligible compensation, whichever is less for the tax year 2011. In 2012, the contribution limit is $50,000. The maximum deductible contribution is 25% of eligible compensation. Your tax advisor can assist you in calculating your maximum deduction.
Keogh AND 403(b) Plans
If you participate in both a 403(b) and a Keogh plan, then the contribution made to both plans cannot exceed $49,000 in 2011 and $50,000 in 2012, or 100% of eligible compensation.
Keogh AND Qualified Plans
Contribution limits for the qualified plan and the Keogh are calculated separately. The maximum contribution to each plan can be $49,000 in 2011 and $50,000 in 2012, 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 $99,000 in 2011 and 2012. 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 Both the contributions and earnings grow tax-deferred until they are withdrawn.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.
Keogh annuity contract form series G1350. Not available in all states.
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 and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.