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for Jim:

After reaching age 59.5 and before reaching age 70.5, your IRA withdrawals can be as large or as small as you wish, with each year's withdrawal determined at your own preference and regardless of what you have done in other years. The consequences of these withdrawals are current income taxes, current money to spend, and less left in the tax sheltered account. When you have to start withdrawals, if you select the term-certain method, you have to completely empty the IRA over that term -- currently it is 16 years for a person 70 years old. This might lead to some remarkably high income taxes in the last few years of withdrawal. If, instead you select the recalculation method, there is NO time frame during which the account must be deleted. After you chose a distribution method, you have only established a minimum withdrawal. You can take more. You need not spend what you withdraw, but can invest it in a taxable account. In short, withdrawal rate does not have to be the same is consumption rate. Your heirs may care which withdrawal method you select, but for greatest freedom to chose current withdrawals, you need the recalculation method, which will give you lower minimum required withdrawals and help you avoid outliving your IRA.

You said that you need your IRA withdrawals, implying that your other retirement assets wouldn't cover your expenses from the time you retire until age 70. It takes some calculation to determine when and whether you have or will have enough assets to retire and a lot more calculation to determine the best rate of drawing from you taxable and tax-sheltered accounts.

I recommend that you check any answers you get on such questions against some authority. My reference for what I've said here is Publication 590. Individual Retirement Arrangements (IRAs), but I may have misunderstood it. Also, I haven't considered here the possibility that your withdrawals will be based on the life-expectancy of TWO people.

Chips, happily retired over six years now
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