Retirement is a time of decision and the decisions have taxing implications.

Certain retirees who receive their pensions in one calendar year can either defer the tax or be taxed in a lower bracket. They cannot have it both ways and should check with a tax specialist before deciding which option to choose.Currently, to qualify for the lower brackets, taxpayers must be born before 1936. To postpone the tax, a retiree has 60 days to roll the pension money over into an Individual Retirement Account (IRA). That is 60 days - no extensions, no excuses.

One San Francisco executive took a three-month trip to Europe that proved expensive, according to Forbes magazine.

Shortly after the executive left, his employer's profit-sharing plan distributed his $600,000 pension. He intended to put the money into an IRA, but didn't learn of the distribution until after the 60-day limit had passed. Tax owed: $250,000.

Thomas G. Smithsi of Eastchester, N.Y., can sympathize. After working 19 years for RCA, Smithsi received a $79,816 pension distribution. Eighteen months later he read an article about postponing the tax on retirement funds, so he asked the IRS about it.

An IRS agent advised Smithsi - erroneously - to request a refund of the taxes paid on the distribution. After many trips to the IRS, an agent suggested he roll over the distribution to an IRA. This he did.

Months later, the IRS gave Smithsi some unsolicited information: They told him his IRA rollover was invalid and furthermore, he didn't pay enough taxes on the original distribution.

Smithsi took his problem to the Tax Court. There the judge said the attempted rollover was two years wide of the mark. He disallowed the refund and agreed with the IRS's increase in tax of $968.

THE MORAL: Advice too late is like medicine after death.

To demonstrate how cranky the IRS is about the 60-day rollover deadline, consider two of its recent rulings.

A retiree wrote a check for an IRA eight days after he received his retirement funds. The check was payable to a person posing as a financial planner who misappropriated the money.

After he recovered some of the money and put it in an IRA, the taxpayer asked for an extension of the 60-day period. The agency refused.

Another unnamed taxpayer had a timing problem. He wrote a check for his IRA, but through a bank clerical error, it bounced. When the poor man wrote another check, the 60-day rollover deadline had passed.

The taxpayer appealed to the IRS for mercy; none was forthcoming. The agency said it had no authority to grant extensions.

THE MORAL: If the check bounces, it won't roll over.