The oldest baby boomers are facing a big birthday this year as they turn 70, which brings with it some forced financial decisions.

The oldest boomers will have to start taking required minimum distributions (RMDs) from their qualified retirement accounts and those who have delayed receiving their Social Security benefits will start receiving that money.

Ideally, the oldest baby boomers began talking with their financial advisors and planning for retirement a decade ago, says Bill Van Sant, senior vice president at Girard Partners Ltd., a Univest Wealth Management company in King of Prussia, Pa.

“This is an important birthday. Those turning 70.5 years old can take their RMD the next year but we advise them to take it the year they turn 70.5 or they will have to take two in the following year, which could push them into a higher tax bracket for that one year,” Van Sant says.

The RMD for retirement plans is determined by a formula based on the value of the assets in the plan. In most cases, the money was not taxed when it was contributed, so it is taxed as it is taken out.

If an annual withdrawal is missed, the penalty is a stiff one, says Mike Piershale, president of Piershale Financial Group in Crystal Lake, Ill. Piershale had a client who was unaware of the required withdrawal, which in her case turned out to be $16,000 for the first year.

“She would have been penalized $8,000 or 50 percent because no one had told her she was required to take money out of her tax qualified plan. We managed to get the money back for her by explaining to the IRS that it was a mistake on her part that first year,” Piershale says.

Withdrawals are required from traditional IRAs and also from company 401(k) plans, if the person is no longer working for the company.

“We make sure we remind our clients of the required withdrawals before they turn 70,” says Piershale.

Ellen Jordan, senior vice president at Bryn Mawr Trust, a wealth management firm in Bryn Mawr, Pa., notes that baby boomers are the first generation that has saved in tax deferred accounts because companies phased out pensions.

“Now they have to start spending what they accumulated and the big scare is that they will not have enough money for the rest of their lives,” Jordan says. “Depending on their health, they may want to continue working.”

Jordan says Bryn Mawr sometimes advises clients to start taking distributions from tax-deferred accounts gradually before they turn 70.5 so they are not pushed into a higher tax bracket when they begin required withdrawals.

Advisors also need to remind clients that Social Security benefits can be taxed. For an individual, 50 percent of Social Security benefit is subject to federal income tax if the income is above $25,000 and 85 percent is taxed if the income exceeds $34,000, according to the Social Security Administration. The limits for couples are $32,000 and $44,000, respectively.

This year presents another deadline as well, advisors are reminding their clients. The Social Security Administration is phasing out the strategy known as file and suspend. Under this strategy, one spouse is able to file and suspend his benefits to allow the other person to collect spousal benefits. This allows the first spouse’s benefits to grow until age 70.

The SSA has given couples until the end of April to file for this benefit, after which it will no longer be available.