(Dow Jones) It's not enough.

The average balance in an IRA would fund less than two years of retirement for the average American and represents not much more than 5% of the income a person needs to maintain a decent standard of living.

The average and median IRA account balances in 2008 were $54,863 and $15,756, respectively. The average and median IRA individual balances--all accounts from the same person combined--were $69,498 and $20,046, according to a new Employee Benefit Research Institute report.

Despite what might seem like paltry balances, IRAs in the aggregate "are an incredibly important piece of the retirement puzzle, since they hold the largest single share of the $13 trillion in U.S. retirement assets," Craig Copeland, senior research associate at EBRI and author of the study, said in a release.

Your IRA, your own piece of the retirement puzzle, whether paltry or not, requires some tender loving care, especially during the last few months of the year. Here's a list of what you might need to do before 2011.

1. Take your required minimum distribution

Make sure all RMDs are taken for the year.

"Look at all owned IRA accounts and employer plans for individuals age 70 1/2 or older this year, as well as at inherited IRAs, employer plans and Roth IRAs," said Beverly DeVeny, an IRA technical consultant with Ed Slott and Company.

"Beneficiaries, no matter what their age, must take distributions from all inherited accounts beginning in the year after the death of the account owner," she said, adding that inherited accounts must be split before year end so beneficiaries can use their own life expectancies to calculate their RMDs.

Speaking of distributions, take any 72(t) distributions that are required for 2010. "If you fail to do this, you will pay penalty and interest retroactively to the first year you started taking these distributions," said Edward J. Lustberg, a certified public accountant.

2. Check for excess contributions

It might seem unlikely, given that the average IRA contribution is $3,798, but it's possible that you contributed too much to your IRA during the year. If so, remove any excess contributions before year end. You will be charged a 6% penalty for excess contributions, said Lustberg.

The maximum amount of an annual IRA contribution for a specified tax year, and whether or not your contribution is tax deductible, varies depending on a number of factors related to eligibility rules, according to Fidelity Investments. In 2009, the maximum allowable contribution to an IRA is the lesser of 100% of eligible compensation or $5,000 in 2009, and $6,000 for those age 50 or older.

3. Is everything in place?

Take nothing for granted when it comes to your IRA. "Before year end, double check on all IRA funds that moved during the year," DeVeny said. "Make sure that IRA funds went into IRA accounts, not non-IRA accounts or Roth IRAs and be sure that Roth IRA funds went into Roth IRA accounts. Look for any unexplained distributions during the year."

4. Can you do a stretch IRA?

Check whether your IRA custodian or 401(k) plan administrator will allow for the so-called "stretch" for beneficiaries, said Ben E. Connor, an attorney with Connor Law Firm.

The stretch means that beneficiaries can use their own life expectancy for distributions. In addition, check whether the custodian or plan administrator will accept a durable power of attorney, and disclaimers.

"The answer to these questions will have substantial impact on the success of their estate plan," Connor said. (If the custodian or 401(k) plan administrator doesn't accept a durable power of attorney or disclaimer, you might consider another custodian or plan administrator.)

5. Who's your beneficiary?

Here's some well-worn but can't-be-repeated-often-enough advice: Review your beneficiary designations. Make sure there is both a primary and a contingent beneficiary named on the beneficiary designation form.

"If there is no beneficiary named, the IRA proceeds will go to the estate and lose the tax advantage of the stretch," said Connor. "If there is no contingent beneficiary, and the primary beneficiary has died and no new primary beneficiary has been named, then the assets also go to the estate with the same negative result."

It's especially worth checking your beneficiary designations if you are divorced, recently or ever.

"Make sure your ex-spouse has been deleted as a beneficiary, unless you want them to remain as a beneficiary," said Connor. "The U.S. Supreme Court has recently ruled that the beneficiary named on the beneficiary designation form trumps divorce."

Connor also advised against naming a "living trust" as the beneficiary. "A living trust should not be the beneficiary because the living trust must qualify as a 'designated beneficiary' to receive favorable stretch and tax treatment," he said. "I find that most living trusts do not qualify, or lose their designated beneficiary status through later changes to the trust."

Make sure your custodian has a written copy of your beneficiary designations.

6. One last chance for Roth conversions

If you plan to do a Roth conversion in 2010, "the funds must leave the IRA by Dec. 31 to be reported and taxable as a 2010 distribution and conversion," DeVeny said. "The funds can then be rolled over to the Roth IRA up to 60 days after they are received by the account owner--up to March 1 if the distribution was received on Dec. 31."

Contrary to what some might believe, you do not have until April 15, 2011, to do a 2010 conversion, DeVeny said.

Here is another reason why you might want to convert some or all of your IRA to a Roth IRA: according to Connor, the Roth IRA could fund a credit shelter or by-pass trust.

"A Roth IRA is usually not subject to the trust tax rate," he said. Also, review your power of attorney to make sure the agent has authority to recharacterize the Roth, if needed, Connor said.

Remember, too, that anyone can convert their traditional IRAs to a Roth IRA in 2010 regardless of income. What's more, you can pay the taxes over two years, instead of one.

7. Turn wealth into income

Right about now, the Social Security Administration is sending you a report that tells you how much income you will receive in today's dollars when you retire. Write down that number on a piece of paper.

Now, total up the value of all IRAs and 401(k)s in your household and multiple that number by 0.04. That number is the amount some experts say you could withdraw from your retirement in today's dollars.

Now, add that number to your Social Security benefit figure, and then subtract that amount from your income. The results are roughly the amount of money you will need from other sources--such as work, pensions, reverse mortgages, life insurance or inheritances--to enjoy a lifestyle similar to what you have today.

Let's use some round numbers as an example. Say you have household income of $100,000. You expect to receive $25,000 per year from Social Security and withdraw $5,000 per year from your retirement accounts. Somehow you will need to come up with another $70,000 per year to live the life to which you are accustomed.

For some, the best way to close the gap will be to contribute more to their IRAs and 401(k)s, work longer, and lower their standard of living.

8. Review your investment plan

Consider updating your investment policy statement or plan. "Make sure your asset allocation remains appropriate given your financial goals," said Michael L. Gay, a certified financial planner with Portfolio Solutions.

Also, rebalance your IRA if you haven't done so within the past year. It's best to rebalance your IRA in a holistic manner. That is, look at all your assets in all your accounts, taxable and tax-deferred.

In many cases, consider putting your fixed-income investments in your tax-deferred accounts and those investments that produce capital gains and dividend income in your taxable accounts. And while you're at it, check whether you've bought or sold any inappropriate investments in your IRA accounts.

"Since IRAs are tax-deferred vehicles, it makes no sense for them to hold 'tax-preferenced' investments such as municipal bonds and annuities," said Gay.

Gay also suggested using your RMDs to rebalance. It could save on transaction costs.

9. Roll old 401(k)s to an IRA

If you have one or more 401(k)s sitting with former employers, consider rolling that money over to an IRA. "You'll generally get better investment choices, lower costs and more control of your investment assets," said Gay.

10. Recharacterize your Roth IRA

If you converted a traditional IRA into a Roth IRA and now realize that your income taxes were higher than expected due to the conversion, or you're short money to pay the income tax or you're unwilling to pay the income tax, consider a recharacterization, DeVeny said. That is, consider putting the money in the Roth IRA back into your traditional IRA.

"This is the last year that some individuals must recharacterize," DeVeny said. "Those who have no choice are individuals who converted in 2009 and whose modified adjusted gross income exceeded $100,000 or who were married filing separate."

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