Transferring a Keogh plan (HR-10) to an annuity can convert a self-employed retirement balance into a predictable income strategy you control. Whether your Keogh uses a profit-sharing, money-purchase, or defined-benefit design, you can usually move qualified assets via a compliant direct rollover to a qualified annuity—maintaining tax deferral and opening up modern income and beneficiary options.

If you’re weighing the move, start by reviewing how a Keogh plan works so you’re clear on funding limits and distribution rules. Then compare income structures and today’s market across current annuity rates before you elect benefits. Done correctly, a Keogh-to-annuity transfer preserves tax deferral, adds payout flexibility, and can secure guaranteed lifetime income for you and a spouse.

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Who Can Transfer a Keogh to an Annuity?

Keogh plans are qualified plans for self-employed individuals and owner-only businesses. Most rollovers happen at retirement, plan termination, or when consolidating old plans. In many cases you can direct rollover to:

• A qualified fixed annuity (MYGA): For multi-year guaranteed growth before income.
• A fixed indexed annuity: For index-linked growth with zero market-loss risk and optional income riders.
• An immediate income annuity: For payments that start soon and continue for life or a defined period.

If your Keogh holds after-tax basis (rare but possible), document it carefully; basis tracking continues in the new qualified contract. For design choices and timing, see our IRA-to-annuity transfer playbook—the workflow is nearly identical.

Why Move From a Keogh to a Personal Annuity?

Keogh plans were built for accumulation and tax deferral, not for tailored retirement paychecks. A personal annuity keeps the tax advantages while adding:

• Lifetime income customization: Choose single life, joint life, period certain, or deferred start—on your schedule.
• Rate shopping across carriers: You’re not captive to one plan’s menu; compare against current annuity rates.
• Beneficiary and legacy control: Modern contracts offer multiple annuity beneficiary death benefits options.
• Behavioral guardrails: Structured payouts help avoid overspending and sequence-of-returns risk late in retirement.

Step-by-Step: How to Transfer a Keogh to an Annuity

1. Obtain a distribution kit: Request your plan’s lump-sum/rollover paperwork. Confirm eligibility and any timing windows.
2. Choose your destination: Decide between MYGA, fixed indexed, or immediate annuity based on income need and risk tolerance.
3. Open and pre-fund the contract: The annuity carrier sets up a qualified contract and prepares trustee-to-trustee transfer forms.
4. Execute a direct rollover: Instruct the plan to send funds directly to the carrier—never payable to you. For background, review what a direct rollover is and why it preserves tax deferral.
5. Elect riders and beneficiaries: Consider guaranteed lifetime withdrawal benefits, cost-of-living adjustments, and spousal features that fit your household plan.
6. Coordinate distributions: Align annuity income with Social Security and other accounts so your essential expenses are covered consistently.

Taxes: Keep Deferral, Stage Income Wisely

A properly executed direct rollover maintains tax deferral from your Keogh to the new qualified annuity. Later, withdrawals and annuity payments are taxable as ordinary income. To keep lifetime taxes lower, stage income to stay within target brackets and avoid avoidable surcharges. If you plan systematic withdrawals instead of lifetime payouts, understand annuity free withdrawal rules so you retain flexibility for surprises.

Curious how different payout patterns change cash flow? Test scenarios with the annuity payout calculator before you finalize elections.

Keogh Plan vs. Personal Annuity — At a Glance

Avoid These Common Transfer Mistakes

• Accepting a check to you personally: This can trigger withholding and taxes. Keep the move trustee-to-trustee.
• Skipping product due diligence: Riders, surrender periods, and income factors vary widely—compare documents before signing.
• Under-insuring spousal income: If married, stress-test joint lifetime options so the surviving spouse’s income stays adequate.
• Forgetting inflation planning: Consider staged start dates or cost-of-living features; see annuity with inflation protection.

Related Pages

• Understanding a Non-Qualified Annuity
• How the Annuity Exclusion Ratio Works
• What Is a QLAC?
• Pre-Retirement Planning Checklist