However stout your clients' tax defenses, there is almostno avoiding the levy against retirement plans for the year they reach70 1/2, when they must start withdrawing cash from IRAsand 401(k) plans and paying ordinary income tax on it,writes Robert Hershey in the New York Times.

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In addition to a possible increase in ordinary tax rates,the 3.8 percent Medicare payroll tax will start next yearto apply to capital gains, dividends andother investment income for joint filers with at least$250,000 in income. Retirement distributions are excluded from theMedicare tax but still must be included in calculations of the$250,000 threshold.

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So, what's a retiree to do? Here, financial planners weigh in onwhether or not to defer your withdrawals until April 1 of thefollowing year, how to decide between a lump sum distribution orquarterly payouts, and how to juggle distributions coming frommultiple retirement accounts.

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