The decisions Tashima makes in the next few months will have profound effects on her lifestyle, her tax bill and the estate the single woman leaves behind.

Smart choices will allow her to afford the kind of months-long European trips she enjoyed in her 20s. She could also fulfill her goal to leave money to relatives and favorite charities. Bad choices could mean running out of money before she runs out of life.

Tashima has made some good decisions already, said Karen Goodfriend, a certified public accountant and personal financial specialist who reviewed Tashima's finances for The Times.

Tashima has no debt, she lives within her means and she is a lifelong investor. But her long love of stocks now leaves her dangerously exposed to market downturns, Goodfriend said, and now is a good time for some diversification.

Overall, Tashima wants to arrange her finances to minimize capital gains, income and estate taxes; maintain her standard of living; handle any long-term health-care needs; and maximize what beneficiaries receive from her estate.

Tashima has been investing since her 20s, when several smart stock picks helped raise a $10,000 fund for graduate school, European travel and a supplement to her stipend as a Fulbright scholar. She spent her working life as a corporate librarian and information manager for large chemical companies in the Midwest. Those jobs offered solid pensions, as well as insight into the fields of chemicals and technology that she used to build her stock portfolio.

By the time she retired from full-time work 10 years ago, Tashima's portfolio, both in and outside her IRA, was worth about $300,000. Today, its value has more than tripled, to $920,000.

"I buy and hold, and some [stocks] do very well," Tashima said.

Tashima lives modestly but comfortably on $38,000 a year, money that comes from Social Security, two pensions, an annuity from stocks she donated to charity and dividends and interest from her investment portfolio. She owns outright a unit in a cooperative apartment building and so doesn't have mortgage or rent expense.

In short, Tashima doesn't need to take much money from her IRA, which is now worth $300,000--but she must.

Tax laws require that minimum distributions from traditional IRAs start in the year following the year an investor turns 70-1/2 and continue annually after that until the IRA is exhausted or the IRA holder dies. Failure to take a distribution means risking a federal income tax penalty equal to 50% of the missed withdrawal.

Ways to Take IRA Distributions

Minimum distributions are calculated based on the IRA holder's life expectancy. IRA holders can choose from two methods of calculating that amount--fixed or recalculated--and can further reduce or increase the minimum distributions to whoever inherits the IRA.

An investor can always take more than the minimum required distribution, but not less.

The fixed method involves determining the IRA holder's life expectancy at the time of the first withdrawal and then reducing the life expectancy one year for each subsequent withdrawal. Tashima's first withdrawal would thus be based on a 16-year life expectancy, while her second would be based on a 15-year life expectancy, and so on.

The recalculation method allows for smaller withdrawals over time because it takes into account that life expectancy increases as we age. Under this method, Tashima's first withdrawal is the same as under the fixed method, but the second payment would be based on a life expectancy in 2000 of 15.3 years, not 15. Details on how to make the calculations are available from the IRS' Publication 590, Individual Retirement Arrangements.

For retirees in Tashima's enviable position, the goal is usually to put off paying taxes as long as possible, allowing the money in the IRA to continue growing tax-deferred, Goodfriend said. But there are other considerations. For example, if Tashima wants to leave some money to charity and some to relatives, who should get the IRA?

If Tashima named a charity as the beneficiary of her IRA, the required distributions would be based on her life expectancy alone, Goodfriend said. That would require a $19,000 withdrawal in the first year.