Traditional and Roth IRAs
Both Traditional and Roth IRAs let your earnings grow tax-deferred until you make withdrawals. However, there are key differences between the two.
- Contributions may be deductible on your federal income tax return
- There are no income limitations for making contributions. However, deductibility is affected by income amounts.
- Earnings are exempt from federal income tax return until withdrawn
- Must start taking withdrawals at age 73
For more information, see Traditional IRA.
- For federal income tax return purposes, contributions are not tax-deductible, but can be withdrawn any time — tax-free
- Earnings are tax-free for qualified distributions
- No mandatory withdrawals at any age
- Contributions are subject to income limitations
For more information, see Roth IRA.
IRA contribution limits
The contribution limit for 2022 is $6,000 and 2023 is $6,500 or 100% of your earned income, whichever is less. The annual contribution limits apply to the combination of all of your Traditional and Roth IRAs.
If you are age 50 or older, you may make an additional $1,000 "catch-up" contribution to your IRA.
Funding options/Open an account
Check out the different ways you can fund your IRAs with State Farm.
Have you ever changed jobs? Are between jobs? Or are retired?
If you have money in a retirement plan from a previous employer, you may be able to roll it over to a State Farm IRA without paying federal income taxes or penalty taxes. This may make it easier to manage your savings.
Learn more at rollovers.
Mutual funds risk disclosures
1 For Traditional IRAs, deductibility of contributions affected by participation in Employer retirement plan. Roth IRA has income phase out limits.
A 10% tax penalty may apply for withdrawals from tax-qualified products before age 59½.
Prior to rolling over assets from an employer-sponsored retirement plan into an IRA, it's important that customers understand their options and do a full comparison on the differences in the guarantees and protections offered by each respective type of account as well as the differences in liquidity/loans, types of investments, fees, and any potential penalties.
Neither State Farm® nor its agents provide tax or legal advice.
Securities distributed by State Farm® VP Management Corp.
Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.
State Farm VP Management Corp. is a separate entity from those State Farm® and/or unaffiliated entities which provide banking and insurance products.