A Keogh plan (named after U.S. Representative Eugene Keogh) is a type of tax-deferred retirement plan specifically for small businesses or people who are self-employed. It allows you to set aside a certain amount from your income before it is taxed, so that you can rack up savings while saving money on your taxes today. Meanwhile, you’re accumulating the cash you’ll need when you stop working in the future.

The plan is tax-deferred, not tax-free, so you will eventually have to pay Uncle Sam when you start withdrawing that money.

Tags: Keogh plan, retirement, tax-deferred