An individual retirement account (IRA) is a personal savings and investment account that helps you save money for retirement. And better still, you’re doing it in a tax-advantaged way. Even if you already own a 401(k), an IRA can enhance your nest egg. Learn about our traditional, Roth, and rollover IRAs, and what they can do to help build a retirement that’s full of promise.

Traditional IRA versus Roth IRA: What’s good for you?

Traditional IRA - for tax-deferred growth

If you think you might be in a lower income tax bracket when you retire, consider a traditional IRA. By contributing money that you can deduct from your income tax return, you’ll reduce your taxable income now. When you eventually withdraw money from your IRA during retirement, you may possibly have less income. So although you’ll still be taxed on those earnings, it will likely be at a lower rate.

Roth IRA - for tax-free growth

If your current income falls within government specified limits, and you expect to be in a higher income tax bracket at retirement, consider a Roth IRA. You will contribute to your account now with money that you‘ve already paid taxes on (after-tax contributions). Your earnings will grow federally tax-free, which should allow them to build faster. When it’s time to withdraw that money in retirement, you’ll typically be free from paying any taxes.

Refer to the snapshot below to see whether a traditional or Roth IRA best meets your needs.

Features & Requirements Traditional IRA Roth IRA

Tax Benefits

Earnings grow federal income tax deferred, so you pay no taxes on these earnings until you withdraw the money.

Earnings grow federally tax free, so you pay no taxes on these earnings1 when you withdraw the money.


Status Of Contributions

Contributions are tax deductible, up to 100%.

Contributions are not tax deductible.


Eligibility Age

There are no age limits to contribute.

There are no age limits to contribute.


Eligibility Income

There are no income limits to contribute.

If you've earned income from employment and are within specified income limits, you can contribute.

Visit the IRS' website for specifics on contribution limits.


Maximum Contribution

Up to $6,500 a year.2 If you are 50 or older, with the option to make an additional $1,000 catch-up contribution, you can contribute up to $7,500 a year.

Up to $6,500 a year – using after-tax dollars.2 If you are 50 or older, with the option to make an additional $1,000 catch-up contribution, you can contribute up to $7,500 a year – using after-tax dollars.



You must begin to make withdrawals starting at age 73. A 10% early withdrawal penalty may apply for certain withdrawals taken before you are 59½. Withdrawals for certain first-time home purchases and certain college expenses are penalty free.

You can typically withdraw your contributions at any time, with no penalty or federal taxes. If you withdraw any of the interest that you've earned before you reach age 59½, or before you have had your Roth IRA for five years, you will have to pay taxes.


Keep contributing to your future rollover IRA

If you’ve changed jobs or retired, and you still have savings left in a prior employer’s savings plan, consider a rollover IRA. Your assets will keep growing tax deferred and you’ll avoid taxes and penalties. More importantly, you can keep contributing to the new account, so your savings can grow.

Are you eligible for a rollover IRA?

If you’ve been participating in your former employer’s retirement savings plan, such as a 401(k), 403 (b), 457 or pension plan, and are eligible to take a lump-sum distribution, you can roll your savings directly into a rollover IRA.


Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.

A financial professional can help you weigh benefits and risks before deciding whether a rollover is best for you. These include: investment options, fees and expenses, withdrawal requirements and potential penalties, tax consequences, and account services.

There is no additional tax deferral benefit for annuity contracts purchased in an IRA or other tax-qualified plan, since these are already afforded tax-deferred status. Thus, an annuity should only be purchased in an IRA or qualified plan if you value some other features of the annuity and are willing to incur any additional costs associated with the annuity to receive such benefits. 

As long as you've held the account 5 years, you're age 59½ or older, or a special exception applies.

2 For the 2023 tax year

2023-153829 20250430