for billteer,First, there is no fixed percentage that you must draw each year. There is, however, a percentage minimum that you must draw that depends on your age and therefore changes each year. Below 70 1/2, that minimum is zero. Just for the record, you are not obligated to spend your withdrawal.1. What is a good source for a simple explanationof the withdrawal rules and the possiblepenalties?I find the rules to be straightforward. The government's official reference is at http://www.irs.ustreas.gov/forms_pubs/pubs/p590toc.htm Publication 590. Individual Retirement Arrangements (IRAs), (Including Roth IRAs and Education IRAs), and its Appendix E, which has two tables. http://www.irs.ustreas.gov/forms_pubs/graphics/15160x17.gif . Interpreting that document is not tough, but I wouldn't leave that task to anyone else. Excerpts:<blockquote>After age 59 1/2 and before age 70 1/2. After you reach age 59 1/2, you can withdraw assets from your traditional IRA without having to pay the 10% additional tax. Even though you can make withdrawals, you do not have to withdraw any assets from your IRA until you reach age 70 1/2. ...There are several exceptions to the age 59 1/2 rule. ...Figure your required minimum distribution for each year by dividing the IRA account balance (defined later) as of the close of business on December 31 of the preceding year by the applicable life expectancy (defined later). ...Life expectancies are determined using life expectancy tables like Tables I and II in Appendix E. </blockquote>You have various choices of beneficiaries and whether to recompute your life expectancy each year. If you recompute, you are allowed to use up your IRA over a period reaching your 120th birthday. If you do not recompute, your life expectancy is computed to fall at the rate of one year per year, so you must withdraw all of it much sooner than that. The advantages of recalculating or not depend on your purposes and your intentions for your heirs, if any. 2. Once I figure out how much I have to withdraw,do I have to withdraw from all equally or canI wipe out one before moving to the next?Quotation from Pub 590:<blockquote>More than one IRA. If you have more than one traditional IRA, you must determine the required minimum distribution separately for each IRA. However, you can total these minimum amounts and take the total from any one or more of the IRAs. </blockquote>As long as you meet the required minimum withdrawal, IRS doesn't care which IRAs you use. But, please, interpret the reference document for yourself.3. Shouldn't I go to a professional financial planner to get advice?No. I would advise seeking professional help only if doing it on your own, reading the IRS publications and consulting Fool boards, leaves you feeling lost. The professional has an inevitable conflict of interest, I believe, where he needs to make you dependent on him to keep those fees coming in. In your interest, his first pieces of advice should be "Fire me and do this for yourself, for free, with a guarantee of no conflict of interest. If you won't fire me now, let me show how to do this for yourself in the future, so that you don't need any help after today."the grizzled Chips
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