It’s hard to keep up with all the legislative changes undertaken as the federal government grapples with the recession.

One change that President Bush signed just before Christmas affects a lot of seniors’ pocketbooks.

Speir Collins, an 86-year-old reader from Nokomis, Fla., asks: “Have you written about the new law that says retirees do not have to take mandatory withdrawals from their IRA accounts during 2009? If not, I think it would be doing old folks like me a great service.”

Tucked in the Worker, Retiree and Employer Recovery Act of 2008 signed by Bush on Dec. 23 was a provision that waives any required minimum distributions in 2009 from retirement plans such as 401(k)s, 403(b)s and certain 457(b)s. The distribution rules also apply to traditional IRAs and IRA-based plans such as Simple IRAs and SEPs (simplified employee pension plans), which provide employers with an easy method to make contributions toward their employees’ retirement or, if self-employed, their own retirement.

If you have such a plan, you probably know, or should know, that the government demands you withdraw a portion of your money even if you don’t need it. The first required minimum distribution payment can be delayed until the following April 1 of the year in which you turn 70 1/2. For all subsequent years, including the year in which the first required distribution was paid, you must take a distribution by Dec. 31.

For many people, the recent rule change is a year too late. With the dive in the stock market last year, many seniors could have used this relief for 2008. The problem is the amount seniors have to withdraw is based on their balances from the previous year.

Experts have advised that if people don’t need money invested in the markets — and they are well diversified — they should ride out the current paper losses. I’m sure many seniors with money in tax-advantaged retirement accounts that have experienced significant losses would like to follow that advice for 2008, but couldn’t because of the IRS rule.

Generally, the required distribution that seniors have to take is calculated for each account by dividing the prior Dec. 31 balance of the person’s IRA or retirement plan account by a life expectancy factor that the IRS lists in the tables of Publication 590 — “Individual Retirement Arrangements (IRAs).”

If you have one or more IRAs, you must calculate the required withdrawal separately for each IRA you own. However, you can withdraw the total amount from one or more of the IRAs. Similarly, a 403(b) owner must calculate the withdrawal separately for each 403(b) plan, but can take the total amount from one or more of them. Withdrawals required from other types of retirement plans such as 401(k) and 457(b) plans have to be taken separately from each of those accounts.

If you fail to take out the required minimum distribution, you face a huge penalty. The amount not withdrawn is taxed at 50 percent. The penalty may be waived if you can successfully argue to the IRS that the shortfall in your distributions was due to a reasonable error and that you took steps to remedy the shortfall. To qualify, you must file IRS Form 5329 and attach a letter of explanation.

Still confused about this rule change? Either get professional help or call the IRS at (800) 829-1040.