A holder of Series 7, 65, and 63 securities licenses, Chris DiGregorio has served as senior vice president of investments with Janney Montgomery Scott since 2005. In addition to helping Janney clients prepare for retirement, Chris DiGregorio assists them with post-retirement planning and saving strategies.While an individual retirement account (IRA) is an important part of planning a comfortable lifestyle after you retire, it's crucial to understand required minimum distributions (RMD) to avoid the possibility of paying a lofty excise tax. By law, you are required to begin withdrawing from an IRA as of April 1 following the year in which you reach 70-and-six-months of age. You can withdraw more than the minimum, but if you fail to make the RMD in that year, you might face a 50 percent excise tax on that amount you were supposed to withdraw.To calculate how much you are required to withdraw in your first year, divide your IRA's balance as of December 31 the prior year by the distribution period set by Internal Revenue Service (IRS) which, for age 70, is 27.4. For example, if your IRA has $1 million, your first RMD for the year would be $36,496.
Guiding the DiGregorio Group at Janney Montgomery Scott, Chris DiGregorio is a respected member of the retirement planning community. Among Chris DiGregorio’s areas of expertise at Janney are inter-generational wealth transfer and retirement income planning.When approaching one’s retirement years, it makes sense to contribute as much as possible to traditional IRAs or 401(k) plans, rather than simply placing the money into a traditional brokerage or savings account. For both traditional IRAs or 401(k) plans, the reason for this is because investment growth is tax-deferred and annual payments do not need to be made on gains as they occur. Instead, those gains can be reinvested in ways that increase the principal further. Taxes only come due on such accounts when withdrawals are taken. Contributions to a 401(k) are limited to $19,000 of pretax income in 2019. However, as a qualified employer-sponsored retirement plan, 401(k) plans may benefit from matching employer contributions.The Roth IRA works in an opposite way. Contributions are made after taxes are taken out and the money in the account grow tax-free. This maximizes the amount ultimately received and is a judicious way of ensuring income throughout retirement.
