Most of us invest in a 401(k) or similar savings plan because we want to enjoy a comfortable retirement. But once you turn 701/2, Uncle Sam wants his share, so he requires you to take withdrawals from your traditional IRAs, 401(k)s and other tax-deferred plans or face a penalty of 50 percent of the amount you should have withdrawn.

If you've built up a large balance in such tax-deferred accounts and have another source of income, such as a pension, RMDs can create a host of tax tribulations. Because the withdrawals are taxed as regular income, RMDs could push you into a higher tax bracket. And the increase in your adjusted gross income could trigger higher taxes on your Social Security benefits, a surtax on your taxable investments and a Medicare high-income surcharge.

The key to avoiding a big tax bill is to start planning for RMDs well before your 70th birthday.

Manage your withdrawals: Once you turn 591/2, you can withdraw money from your tax-deferred accounts without paying a 10-percent early-withdrawal penalty. The withdrawals are still taxed as ordinary income, but after you retire, you might drop into a lower income tax bracket. A financial planner or accountant can help you figure out how much you can withdraw each year without moving into a higher tax bracket.

Over time, these withdrawals will shrink the size of your tax-deferred accounts, resulting in lower RMDs when you reach 701/2 and beyond. And that's not the only upside to this strategy. If using IRA withdrawals to pay living expenses lets you postpone claiming Social Security benefits, you could significantly increase the size of your payout. For every year past your full retirement age that you delay, your benefit increases by about 8 percent until age 70.

Convert to a Roth IRA: Converting funds from your traditional IRAs and 401(k)s to a Roth IRA offers several advantages. You can always withdraw the contributions to a Roth tax-free, and once you're 591/2 and have owned the Roth for five years, earnings are tax-free, too. More significantly, Roths aren't subject to RMDs, so you can withdraw as much or as little as you need after age 701/2 without worrying about the tax bill.

But you must pay taxes at your regular income tax rate on any funds you convert, so be careful. A large conversion could push you into a higher tax bracket and trigger the chain reaction of unpleasant consequences noted above.