Text for Keogh plans is ambiguous

It is written:

HR-10 plans , also known as Keogh (pronounced key-o) plans, are retirement accounts created for smaller professional practices (like a dentist’s office or law firm). The employer has a 2020 contribution limit of $57,000 or 25% of their income, whichever is less. When the employer makes a maximum contribution to their own plan, they must make a matching contribution to their employees’ plans equal to 25% of their income.

So when an employer makes the max contribution to their OWN plans, do they have to make a contribution equal to 25% of ‘their’ (the employer’s) income or to ‘their’ (the employee’s) income?


Great catch, @Trent - I’ll update the material to be more clear. It’s 25% of the employee’s income. For example, let’s assume a doctor contributes the maximum to their own Keogh plan. If they have a nurse on staff that makes $40,000 a year, the doctor must contribute $10,000 (25% of $40,000) to the nurse’s Keogh plan.

Thanks for pointing out the vague language! Let me know if you have any other questions.


Fantastic. That’s what I figured, but good to get clarity!

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