In which retirement plan do contributions grow tax-deferred until retirement?

Contributions to both Keogh Plans and SEP IRAs grow tax-deferred until retirement, making them effective options for self-employed individuals and small business owners to save for retirement.

In both plans, the money that is contributed is not taxed until it is withdrawn during retirement. This means that the funds can accumulate interest, dividends, and capital gains without being diminished by current taxes, potentially resulting in a larger retirement fund.

Keogh Plans, also known as HR-10 plans, are designed specifically for self-employed individuals, allowing them to contribute significantly more than traditional IRAs. SEP IRAs, or Simplified Employee Pension IRAs, are also intended for self-employed individuals and small businesses, featuring easy setup and minimal paperwork requirements.

The tax-deferred growth aspect is a core feature of these plans, attracting individuals who want to maximize their retirement savings. Thus, the correct answer encompasses both the Keogh Plan and the SEP IRA.