This document provides information about opening and contributing to Individual Retirement Accounts (IRAs). It discusses the benefits of IRAs for retirement savings including tax advantages. It outlines contribution limits and rules for traditional and Roth IRAs. The document encourages starting contributions as early as possible, even if just small monthly amounts, to benefit from compound interest over many years of savings. It also provides contact information for Spencer Savings Bank, which offers IRA accounts and services.

1. IT’S IRA SEASON –
SAVE FOR RETIREMENT
WHILE ENJOYING TAX
BENEFITS

2. Overview
As a group, Americans are not doing well in preparing for retirement. Research shows that most
Americans do not have enough money saved for retirement and many are very concerned. One of
the main reasons for lack of saving are incomes that have not changed (or decreased) over the
years, while cost of living continues to rise and salaries are not going as far as they once did to
cover all the necessities.
Opening an IRA (Individual Retirement Account) and contributing to it regularly can create a secure
retirement scenario for your future. It is one of the most effective retirement tools available. There
are two types of IRAs, Traditional and Roth, and they are both designed to help you save for
retirement. With both options, money contributed grows on a tax-deferred basis. You won’t pay
taxes on any of your investment gains from now until retirement.
A traditional IRA is funded with pretax dollars. Typically you will get a tax break the year you
contribute to your traditional IRA, and you won’t pay any taxes until the time comes to make
withdrawals. When you retire and do so, you’ll be required to pay income tax on these funds saved.
Your money will be taxed as ordinary income. With a Roth IRA, you won’t get the tax break up-font
because contributions are made with after-tax dollars. However, withdrawals in retirement are
made tax free.
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3. Benefits Add Up
The amount you can accumulate depends on two
factors – what you contribute and how much the
funds grow within the account. Of course, the
more contributions you make and the higher the
earnings rate, the more you will accumulate. No
one can control (or accurately predict) what will
happen with interest rates or the stock market.
But, you control how much and how often you
contribute. Thanks to compounding interest,
IRAs will continue to grow even if you are unable
to fund them every single year.
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4. Basic Rules for Traditional IRAs
▪ Contribution limits for 2019 – Those under the age of 50 can contribute $6,000 ($7,000 if
you’re age 50 or older). The only requirement is that you have wages in excess of your
contribution level. For 2018, your total contributions to all of your traditional and Roth
IRAs cannot be more than $5,500 ($6,500 if you’re age 50 or older). Also, your total
contributions cannot be more than your taxable compensation for the year, if your
compensation was less than these dollar limits.
▪ Deductibility of contributions for 2018– Contributions are tax deductible if you are not
eligible to participate in your employer’s qualified retirement plan or if your Adjusted
Gross Income is below certain levels ($63,000-$73,000 for single filers and $101,000-
$121,000 for those filing jointly).
▪ Tax benefits – The earnings on funds within an IRA are not subject to income tax when
earned.
▪ Distributions – You must start taking distributions in the year you reach age 70 ½ and
distributions are taxable.
▪ Penalties for early withdrawals – Withdrawals before age 59 ½ are subject to a penalty
tax of 10% along with regular income taxes.
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5. Roth IRAs have the same contribution limits,
however contributions are not allowed for those
with Adjusted Gross Income above certain levels.
Contributions are not deductible, earnings are
tax-deferred like a regular IRA and there are no
distribution requirements. Early withdrawals are
subject to the 10% penalty tax. If your income
exceeds certain amounts, then your permissible
Roth contribution can be reduced or even
eliminated entirely. (For 2018 – if you are single
you must have a modified adjusted gross income
under $135,000 and under $199,000 for married
filing jointly.)
Roth IRAs
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6. The contribution limit for 2019 is $6,000 for
those under the age of 50 and $7,000 for those
50 and above. If you make annual contributions
of $6,000 for 30 years and earn 5%, your IRA
account would be worth $400,000. The keys are
to start early and contribute every year. Waiting
just one year or missing a year can cost you
plenty. Use an automatic savings plan to make it
easy. If you are under the age of 50 and start in
January, you can make your full contribution
with only $500 each month. If you are age 50 or
above, it only takes $583.00 each month.
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Start Now and Make It Easy

7. Start Your Automatic Savings
Today
There is no easier way to save than with an
automatic savings plan. If you are already using
direct deposit for your paycheck, have your
financial institution transfer the amount each
month. You can also have your employer deduct
the amount each month and deposit into the
account of your choice.
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8. Consult Your Tax Advisor
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Everyone’s tax situation is different and you may
want to discuss your situation with a qualified
tax advisor to learn how the rules may apply in
your situation. If you are unsure which NJ IRA
option is best for you, visit the “Personal” section
of our website for more IRA information or speak
to your tax advisor.

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Open Your Account Today
At Spencer, we’re committed to your long-term
retirement goals. We currently have a JUMBO IRA
promotion available (for those who qualify). If you
have IRAs at multiple banks and are not getting a
great rate, speak to one of our IRA specialists. We
can manage all of your IRAs and RMDs easier by
consolidating them for you into one great rate. We
will handle the paperwork and entire process for
you. We also have our standard IRA accounts, all
designed to provide you with tax advantages while
you save for retirement. Speak to one of our IRA
specialists to learn which account is right for you.
Learn more about IRAs on our website, visit your
local branch, or call us at 1-800-363-8115 today!

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ABOUT US
Spencer Savings Bank is a full service, mutually owned and operated, community bank operating 21 branches across
New Jersey. We’ve been in business for over 100 years, have more than $2.7 billion in assets and a team of nearly 300
dedicated employees who specialize in delivering premier banking products and services.
Spencer prides itself on being one of New Jersey’s strongest community banks – maintaining its distinct image of
trust, security and commitment to its customers throughout all these years. We meet the full range of individual,
business, commercial, and municipal banking needs through our broad menu of banking products and services.
From basic personal checking services and small business products to financing expertise on multi-million dollar
properties and commercial enterprises, Spencer’s banking capabilities are on par with those of the larger regional
and national banks. Our highly experienced management team provides a unique and personal approach to banking
locally, servicing its customers with an exceptional level of care that can rarely be found at larger banks.
At Spencer, we understand the importance of getting to know you as a customer. Not only will you have access to
our broad menu of banking capabilities, you’ll also receive the personal attention you deserve as a valued customer.
By taking the time to understand your needs, we become partners in the success of your business and personal
financial goals. We’re also proud to partner with our neighbors to improve the quality of life for our community. With
our roots as a community bank, we proudly support local business and workforce initiatives in the areas we serve, in
addition to numerous civic groups, charitable organizations and youth educational programs.

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CONTACT US
▪ Mailing Address - 611 River Drive
Elmwood Park, NJ 07407
▪ Customer Service - 1-800-363-8115
▪ Email ID -
personalaccounts@spencersavings.
com