QI have read in Kiplinger's February magazine (page 68), "If you're still on the job at age 70 1/2, you can generally skip the required minimum distribution (RMD) from your employer plan until you retire." I would like to know if this is absolutely true as I am still on the job full time and just over that age.


AThe quick answer is yes. In its magazine and online, Kiplinger's offers well-researched and well-reasoned financial advice. The article "RMD Rules for Retirees: The tax man forces you to take payouts from your retirement accounts," by contributing editor Kimberly Lankford covers the basics well. My takeaway from her article is how Byzantine are the rules surrounding withdrawals during retirement.

The government has required minimum distributions (RMDs) so that savers are forced to tap into their tax-sheltered retirement money, including employer-sponsored plans like 401(k)s and traditional IRAs. You must make at least the required minimum distribution the year you turn 70 1/2. (Your RMD is calculated by adding up everything you have in your traditional IRAs on Dec. 31 of the previous year and dividing that sum by your life expectancy. The IRS publishes the life expectancy tables. Of course, you can take out more than the minimum requirement if you like. (There is no RMD when it comes to Roth IRAs during the lifetime of the owner. However, the beneficiary of an inherited IRA does have to follow strict distribution guidelines. Also, you cannot use distributions from your Roth IRA to satisfy the RMD for your traditional IRA.)

To your question, a key exception is if you're still employed at age 70 1/2, if you don't own 5 percent or more of the company you're working for, and the savings plan isn't an IRA you can wait to make withdrawals until you retire.

My beef is that the government has made it incredibly complicated to retire, with all kinds of twists and turns, exceptions and pitfalls, to everything from Social Security to IRAs. On top of that, we need to figure out our asset allocation for our elder years and calculate how much we can safely withdraw every year. The law gives employers a great deal of latitude when it comes to writing the rules of a particular retirement savings plan.

I recently was on the Diane Rehm show, a nationally syndicated public radio show broadcast out of Washington, D.C. The other guest was Jane Bryant Quinn, the dean of personal finance columnists. She has updated her terrific book, "Making the Most of Your Money Now." In answering a listener question she said it was a smart move to consult with a fee-only financial planner around the time of retirement. I couldn't agree more, and questions like Loren's underline why. A good fee-only financial planner can give you a set of guideposts to think about, lay out the key trade-offs, walk you through the retirement plan and Social Security rules, and make recommendations for managing your money during the last stage of life. My only addition to her advice: a good gift from adult children to their aging parents is to pay the financial planner's fee.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org.