"It would have been a great big help last year," Collins said. "Everybody is hurting the way the markets have been going."

Generally, the required distribution that seniors have to take is calculated for each account by dividing the prior Dec. 31 balance of the person's IRA or retirement plan account by a life expectancy factor that the IRS lists in the tables of Publication 590 -- "Individual Retirement Arrangements (IRAs)."

If you have one or more IRAs, you must calculate the required withdrawal separately for each IRA you own. However, you can withdraw the total amount from one or more of the IRAs. Similarly, a 403(b) owner must calculate the withdrawal separately for each 403(b) plan, but can take the total amount from one or more of them. Withdrawals required from other types of retirement plans such as 401(k) and 457(b) plans have to be taken separately from each of those accounts.

You have to get this right because if you fail to take out the required minimum distribution, you face a huge penalty. The amount not withdrawn is taxed at 50 percent. The penalty may be waived if you can successfully argue to the IRS that the shortfall in your distributions was due to a reasonable error and that you took steps to remedy the shortfall. In order to qualify for this relief, you must file IRS Form 5329 and attach a letter of explanation.

I should note that the recent rule change does not waive any 2008 required minimum distributions for individuals who were eligible but chose to delay taking their 2008 requirement payments until this April 1. In other words, let's say you are a retiree who turned 70 1/2 in 2008 but wanted to wait until April 2009 to take a distribution. You must still take your full 2008 required retirement payment by April 1. The act does not waive any required payments for 2010.

If you are receiving distributions over a five-year period, you can now waive the distribution for 2009, effectively taking distributions over six years, the IRS indicated in a notice after the enactment of the Worker, Retiree and Employer Recovery Act.

Still confused about this rule change? It would not be surprising. Either get professional help or call the IRS at (800) 829-1040 to make sure you are taking the right distribution.