Financial advisors spend much of their time helping clients accumulate money. But when the client turns 70 1/2 years old, he has to start taking required minimum distributions (RMDs) and a wealth of tax implications are involved.

When to take the money and how much to withdraw depends on the client's tax bracket and how the money was saved, according to financial advisors.

"Think of it as a partnership. You own most of the money, but in most cases the government owns part of it," says William Reichenstein, head of research for Retiree Inc., a research and advisory firm in Leawood, Kan. Reichenstein holds the Pat and Thomas R. Powers Chair in Investment Management at Baylor University.

During the year a person turns 70 1/2, she can delay her first withdrawal and paying taxes on it until April 1 of the next year. For all subsequent years, withdrawals must be taken by December 31.

For instance, if the retiree turns 70 1/2 this year, her 2012 withdrawal can be delayed until April 1, 2013. But her 2013 withdrawal must be taken by December 31, 2013, so she would end up paying taxes on two withdrawals that year plus any other income. This could easily push her into to a higher tax bracket. The other option is for the client to avoid two withdrawals in one year and not delay the first withdrawal.  

"You have to determine what you are trying to accomplish," say Lauren Locker of Locker Financial Services in Little Falls, N.J. "If your client is about to quit working, you might want to have him quit before he has to take the withdrawal if he is going to take two in the first year."

Experts advise not waiting until the last minute on RMDs because a substantial penalty of 50 percent of the withdrawal applies if a retiree fails to take one in any given year.

RMDs start at about 4 percent of the total account and increase slightly as a person ages. A person may want to start taking withdrawals after they reach 65 but before 70 1/2 if they have a serious illness or think they may not have a long retirement.

Advisors should try to structure withdrawals so that the retiree does not get pushed into the next bracket, Locker says.

More than the RMD can be withdrawn, but the retiree has to be careful not to run out of money. A 65-year old man has a 41 percent chance of living to be 85 and a 20 percent chance of living to be 90, according to the Society of Actuaries. A 65-year old woman has 53 percent chance of living to be 85 and a 32 percent chance of living to age 90.