Connecticut Life Producer Practice exam

Who is eligible to participate in a Keogh (HR-10) Plan?

1. Any individual over the age of 18

2. A self-employed individual or partner with at least 10% ownership

3. Employees of corporations with over 100 members

4. Only full-time employees of a business

The correct answer is: A self-employed individual or partner with at least 10% ownership

A Keogh (HR-10) Plan is specifically designed for self-employed individuals and partnerships. This retirement plan allows these individuals to contribute a portion of their income toward retirement savings while enjoying significant tax advantages. The essential requirement here is that the individual must be self-employed or a partner in a business, and they need to have a substantive ownership stake, which is indicated by having at least 10% ownership. The focus on ownership and self-employment clearly distinguishes Keogh plans from other types of retirement plans, such as 401(k) plans that are often available to employees. This encapsulates why the choice related to eligibility for self-employed individuals or partners with minimum ownership is accurate and highlights the unique niche that Keogh plans serve in the retirement planning landscape. Other options do not fit the criteria for participation in a Keogh plan. Individuals over a certain age or employees of larger corporations do not meet the specific eligibility requirements tied to self-employment or partnership status, which is critical for enrolling in a Keogh plan. Additionally, restrictions regarding part-time versus full-time work do not apply here since the plan is focused on employment status rather than employee classification within a business.