Difference between Traditional IRA and Roth IRA

For the Traditional IRA, yearly contributions are tax-deductible, but income is taxed. For the Roth IRA, yearly contributions are not deductible from income, but earnings on the Roth IRA can be tax-free.

Subject to certain limitations, you can transfer funds from an existing IRA into a Roth IRA without the 10 percent penalty tax. However, the IRS will treat this transaction as an income-taxable event.

If you are considering an IRA, Farmers can help you calculate what's best for you. We also strongly recommend that you consult your tax adviser before making a decision.

Traditional IRAs
Roth IRAs