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

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.

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.

4. 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. Basic Rules for Traditional IRAs

5. Roth IRAs 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.)

6. Start Now and Make It Easy 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.

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.

8. Consult Your Tax Advisor 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.

9. 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!

10. 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.

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