The American Medical Association has now established a retirement plan for qualified member physicians and their full-time employees.
The Plan is made possible by the Keogh Bill (Public Law 87-792), signed into law on Oct 10, 1962, allowing the self-employed to participate in tax-deferred retirement programs.
According to this law, a self-employed individual can set aside in a qualified retirement fund up to $2,500 or 10% of his annual income, whichever is less, of which the first 50% is tax deductible. In order to qualify, a self-employed individual must provide proportionate benefits for any full-time employee who has worked for him for at least 3 years, or he may contribute for all of his full-time employees regardless of their length of service. However, the coverage in either case must be on a nondiscrimatory basis. The entire amount contributed for employees is tax-deductible.