In embodiments of optical arrangements of a working distance sensor in a fundus camera that can improve the determination of a correct working distance as well as the transverse positioning of the camera a number of near infrared light sources are arranged to project a number of near infrared illumination beams into the visible light illumination path of the fundus camera and a live view of the retina under near infrared illumination is captured and displayed on a monitor. These embodiments of optical arrangements and associated methods will enable an operator to directly determine if there is any undesirable flare or other artifact appearing within a designated region on the infrared retina view as a result of a wrong alignment of the fundus camera with respect to the eye in terms of not only the working distance but also the horizontal and vertical positions. Pattern recognition algorithms can be used to further enhance the positioning sensitivity of the working distance sensor. An additional iris alignment sensor can be added to achieve a coarse alignment and also function as a measure to determine if the dilation of the iris size is sufficient for different mode of fundus imaging.