Retirement, Investments, & Insurance for Individuals Invest & Retire Individual Retirement Accounts (IRAs)

Individual Retirement Accounts (IRAs)

What's an IRA?

In short, it's an account that allows your money to grow in a tax-advantaged way. Depending on the type of account you choose, you can pay taxes now and watch your money grow tax-free—or you can defer paying taxes until retirement.

Why choose an IRA?

IRAs are built to help you pay for everyday things and even bigger dreams after your working years. They enable you to reduce the tax burden on your finances and allow you to save beyond an employer's retirement plan.

Why choose an IRA?

Traditional or Roth IRA?

A traditional IRA lets you deduct savings contributions from your taxes, which lowers your taxable income for the year -- but you pay taxes on the money when you withdraw it in retirement.

A Roth IRA uses after-tax money, meaning you pay taxes on your contributions at the time you put the money in and, future withdrawals are tax free as long as you follow Roth IRA rules.1

Traditional IRA Roth IRA
Are there income limitations?

You must have earned income, but there’s no maximum limit.2

To contribute the full amount allowed by the IRS in 2023, your Modifed Adjusted Gross Income (MAGI) must be below:

  • $138,000 for a single tax filer.
  • $218,000 for a joint tax filer.
How much can you contribute?
Up to $6,500; if you’re 50 or older, you can contribute an additional $1,000 in 2023.
When do you pay taxes? 

In retirement, when you withdraw your savings.

Up front, before you contribute. Your earnings then grow tax free. There are no taxes or penalties on withdrawals made after age 59½.1

    What are the rules about withdrawals?

    You can withdraw contributions and earnings penalty-free at age 59½, or earlier for certain hardships. You have to start taking required minimum distributions after age 73.

    Learn more about traditional IRAs

    You can withdraw contributions at any time, without penalty. You can withdraw earnings, penalty-free at age 59½, or earlier for certain hardships, as long as you've followed the rules of a Roth IRA.1 You're not required to withdraw your money at any age.

    Learn more about Roth IRAs

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    1 Your account must be open for 5 years and you must be over 59 ½ to be eligible for qualified tax-free withdrawals of earnings.
    2 Deductibility of contributions is dependent upon coverage by an employer-sponsored retirement plan for you or your spouse and your Modified Adjusted Gross Income (MAGI).

    This document is intended to be educational in nature and is not intended to be taken as a recommendation.

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