Make your retirement dreams a reality. Depending on when you were hired, you may have up to two ways to secure your financial future in retirement: through the State Farm Retirement Plan (pension) and/or the 401(k) Savings Plan. All employees have access to the 401(k) plan, which offers two options for setting aside money for retirement — one that allows you to pay taxes now and one that lets you wait until later. Even better, State Farm chips in to help you achieve your long-term savings goals.
Retirement on your mind?
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State Farm Retirement Plan
The State Farm Retirement Plan provides monthly retirement (pension) income for vested employees hired prior to January 1, 2021, who are age 55 or older. For more information, visit the State Farm Benefits Resource website (auto sign-on with SSOYou must be on the State Farm network to access this link. | log in) > Pension > Account Summary.
State Farm 401(k) Savings Plan
Our State Farm 401(k) Savings Plan helps you save for retirement through tax-advantaged contributions and investment growth. Your account is managed through Vanguard (auto sign-on with SSOYou must be on the State Farm network to access this link. | log in), where you can enroll, adjust contributions, and monitor investments.
Plan highlights
- You can set aside money for retirement on a pre-tax or Roth (after-tax) basis, with deductions taken directly from your paycheck. Your account grows with your contributions, State Farm contributions, and investment earnings. Note: All investing involves risk, including the possible loss of the money you invest.
- New hires are automatically enrolled at a 4% pre-tax contribution rate, and contributions are invested in a target date fund based on the year the new hire turns age 65, unless they make a different election or choose to opt out within the first 30 days after the hire date. Your contributions increase automatically by 1% every year (up to 15%) unless you opt out or make changes.
- If you were hired before January 1, 2021, you were automatically enrolled at a 3% pre-tax contribution rate. Your contributions increase automatically by 1% every year, up to 10%.
- You can make pre-tax and Roth contributions up to the following maximums in 2026:
- Through age 49: $24,500
- Ages 50–59 and 64+: $32,500 ($24,500 + $8,000 catch-up)
- Ages 60–63: $35,750 ($24,500 + $11,250 catch-up)
- You need to make a separate election for incentive pay; until you make that election, 401(k) contributions will not be taken from your annual incentive payment. Your incentive contribution election will remain in effect until you change it.
- You can make changes to your contribution elections at any time.
For plan details, visit Vanguard (auto sign-on with SSOYou must be on the State Farm network to access this link. | log in) > Explore > Plan Details, Communications & Forms > Plan Communication > Legal and Regulatory.
3 reasons to participate in the 401(k)
- You get free money from State Farm. State Farm makes an annual Nonelective Contribution (NEC) for all eligible employees and offers a company match on qualifying employee contributions.
- You can save on taxes in two different ways.
By contributing to the plan with pre-tax dollars (the money you set aside before taxes are deducted), you owe less to the IRS in the years you contribute. You’ll pay taxes on these contributions when you take distributions in retirement.
The Roth 401(k) contribution option offers you a different type of tax advantage. The earnings you accumulate in a Roth 401(k) account can provide you with tax-free income in retirement. Taxes are withheld from Roth contributions and count as taxable income in the year they are contributed.
- You choose how to invest your money. In addition to the default target date fund, you can choose from among a variety of fund options, depending on your risk tolerance and retirement timeline.
Your contribution options
The State Farm 401(k) Savings Plan offers you two ways to build your savings, so you can choose when and how to pay taxes on your contributions and earnings based on your individual financial needs.
Pre-tax contributions
Pre-tax contributions
Contributions are deducted from your paycheck before taxes, reducing your federal and state taxes for the current year. You’ll pay taxes on these contributions when you take distributions after you retire. This option is typically better if you expect your income tax rate to be lower when you retire than it is right now.
Roth contributions
Roth contributions
Taxes are withheld from your contributions and count as taxable income for the current year. However, you won’t pay taxes on contributions or investment earnings when you take distributions after you retire, if certain qualifications are met. This option is typically better if you expect your income tax rate to be higher when you retire than it is right now, or if you are young and have more time to accumulate tax-free earnings.
Catch-up contributions
Catch-up contributions
If you’re age 50 or older, the IRS allows you to make additional 401(k) contributions. See Plan Highlights above for contribution limits.
As of January 1, 2026, the SECURE 2.0 Act of 2022 requires you to make these catch-up contributions as Roth if your State Farm FICA wages were more than $150,000 in 2025; everyone else can choose pre-tax or Roth.
The company does not match catch-up contributions.
Company contributions
If you were hired before January 1, 2021
If you were hired before January 1, 2021
State Farm makes a $300 Nonelective Contribution (NEC) to your account every year. The company also matches your contributions dollar for dollar, up to $900. The matching contribution is made in March of the following plan year.
You’re immediately vested in any company contributions.
If you were hired on or after January 1, 2021
If you were hired on or after January 1, 2021
You receive an annual Nonelective Contribution (NEC) equal to 3% of your prior-year eligible pay. Plus, State Farm matches your contributions dollar for dollar (excluding catch-up contributions), up to 4% of your eligible pay, on each payday. In total, the company contributes up to 7% of your eligible pay to your 401(k), helping you build your retirement savings even faster.
You qualify to receive the company matching contribution and NEC after 183 days of service, and you’re immediately vested in any company matching contributions. You are 100% vested in the NEC after three years of service.
Consult an expert
Which contribution types are right for you? Is a target date fund a good fit, or should you consider other investment options? For answers to these and other finance-related questions, tap in to the financial planners and financial education resources at EY Navigate, at no cost to you.
Investment options
Choose from a variety of investment funds:
- Target date funds: These funds gradually shift to a lower-risk profile as you approach retirement.
- Index funds and other options: These are additional low-cost funds with different objectives, strategies, and risk levels.
For comprehensive line-up details, visit Vanguard (auto sign-on with SSOYou must be on the State Farm network to access this link. | log in).
Portability and consolidating old accounts
Portability
Portability
You can take it with you! The vested balance in your State Farm 401(k) is yours to keep, even if you leave State Farm. If your balance is more than $7,000, you can leave the money in your account; if it’s less, it will roll over to an IRA (Individual Retirement Account) if you take no action.
For all your options and plan details, review the 401(k) Savings Plan Summary Plan Description (SPD) on the Vanguard website (auto sign-on with SSOYou must be on the State Farm network to access this link. | log in). From the home page, go to Explore > Plan Details, Communications & Forms > Plan Communication > Summary Plan Description.
Consolidating old accounts
Consolidating old accounts
Depending on your career history, you could have other retirement accounts from previous employers. To make managing your retirement savings easier, you can roll over money from another employer’s qualified plan or IRA to the State Farm 401(k) plan.
Rollover contributions are fully vested and invested according to your current election or default target date fund.
Loans and withdrawals
Under certain circumstances, you can take a loan or make an early withdrawal from your 401(k). To learn more about loans and withdrawals, including when penalties do/don’t apply to early withdrawals, review the 401(k) Savings Plan Summary Plan Description (SPD) on the Vanguard website (auto sign-on with SSOYou must be on the State Farm network to access this link. | log in). From the home page, go to Explore > Plan Details, Communications & Forms > Plan Communication > Summary Plan Description.
Loans
Loans
Generally, the Plan allows you to borrow up to 50% of your vested account balance, to a maximum of $50,000. The minimum loan amount is $500. You then pay the money back to your account, plus interest, through after-tax payroll deductions. Loans can continue to be repaid after termination of employment.
You have up to 60 months to repay a general purpose loan or up to 120 months to repay a primary residence purchase loan.
Withdrawals
Withdrawals
Depending on the type of withdrawal you take, you may pay an early withdrawal penalty if you take money from your 401(k) before age 59½. Typically, you’ll pay regular income tax on the taxable portion of the withdrawal plus the additional 10% federal income tax penalty on early distributions.