Publication Date


Document Type


First Advisor

Iliff, Kathryn (Professor of accountancy)||McCormick, Frank L., 1922-

Degree Name

M.S. (Master of Science)

Legacy Department

Department of Accountancy


Retirement income


In 1962 the Self-Employed Individuals Retirement Act was passed into law. This Act allowed self-employed persons to invest in a tax-deferred program for retirement. The purpose of this investigation was to compare the Keogh Act with other retirement income plans for self-employed individuals under both the original 1962 Act and the Act as revised in 1968. The following sub-problems were considered: 1. Should the self-employed person invest retirement funds in a Keogh Act plan or in some ether retirement program under the 1962 Act and under the revised 1968 Act? 2. What specific retirement income program! should the self-employed utilize under the Keogh Actor outside the Keogh Act? The two sources of data for this study were (l) interviews and (2) tax manuals and periodical literature. The interviews were conducted with bankers, public accountants, and stock brokers. The tax manuals and periodicals used were from professional medical and tax publishing firms, insurance companies, banks, and brokerage firms. From the information obtained, computations were made to determine whether a self-employed individual should establish and invest in a Keogh Act program. The age groups of 35, 40, and 45 were combined with income groups ranging from $10,000 to $50,000 per year. The study explored the effects of employing none, one, two, three, and five persons in each self-employed age and income group. Charts were prepared comparing the results of these computations. The four programs allowed by the Keogh Act (trusts, custodial accounts, insurance plans, and United States Government Retirement Bonds) were analyzed and compared. Common and preferred stocks, bonds, and mutual funds were three specific plans selected and compared for retirement investment programs outside the Keogh Act. It was concluded that the 1968 Keogh Act aids the self-employed person much more than the original 1962 Act. Self-employed individuals must utilize the charts prepared in this survey to determine whether they would benefit more financially by investing through the Keogh Act or through an independent retirement program. Intangible factors such as employee morale, employee turnover, and forced savings must also be considered by the self-employed person in arriving at a decision. A pooled trust and a mutual fund trust were determined to be the best investment possibilities available under the Keogh Act. Mutual funds were considered the best retirement investment program for the self-employed person who decided not to choose Keogh Act plans. Common or preferred stocks were a secondary choice for retirement investments outside the Keogh Act.


Includes bibliographical references.


xi, 122 pages




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