As a proponent of financial literacy, I am always interested in how people are doing when it comes to saving and investing for retirement.

A recent survey by Fidelity, one of the largest asset managers in the world, provides some insights that I’d like to share.

The “2021 State of Retirement Planning Study” highlighted some challenges when it came to financial knowledge.

Far too many of those surveyed (28%) believed that financial professionals would recommend a withdrawal rate from retirement savings of 10% to 15% a year.

Those of you who are longtime readers of this column would not fall into that cohort. But those who do would find themselves in jeopardy of running out of money unless they had very short retirement horizons. If you would like more information about safe withdrawal rates for retirement, I cover the topic in detail in “The Retirement Survival Guide,” along with tools to use to help you run your own numbers.

Another area of concern is Social Security’s “full retirement age” (FRA). Only 17% of the respondents knew their correct number.

While you can start getting Social Security retirement benefits at 62, that means you’ll receive a permanent reduction in your monthly payments. Forty-four percent of Generation X, the age group between 41 and 56 years old, underestimated their FRA -- that doesn’t help when you’re trying to plan for the future.

According to the Social Security Administration (tinyurl.com/4ujbfvyv), the FRA for people born between 1943 and 1954 is 66. For those born between 1955 and 1959, it’s between 66 and 67, depending on the year. If born in 1960 and later, the FRA is 67.

Another misconception had to do with stock market returns. Seventy-two percent of respondents said they believed the stock market had seen negative returns more frequently than positive ones over the past 35 years. Not so. As Fidelity reported, the stock market has had a positive annual return for 26 of the past 35 years.

What about how much money you need to have saved before retiring? Based on the last year of working income, half of the respondents said the figure should be five times or less the final year’s income. Not enough. Only 25% selected the ideal recommendation of having 10-12 times your last full year of working income saved by the time you reach retirement.

Only 33% of respondents have a plan in place to achieve their retirement goals. I can tell you that’s not good enough. Retirement can last 20, 30 or even 40 years. Just think of retirement as a business that needs to thrive for decades. Without a plan on how you will do that, you’re deciding to roll the dice. Why would you want to do that? Do you think of yourself as a gambler?

Another 31% of respondents thought “in great detail” about how they would afford retirement. Well, that’s a start. But again, not good enough.

We have to face the fact that you, only you, can secure your retirement -- you can get help, of course, but it’s up to you to seek it out. That’s why I’m such a believer in financial literacy education. It’s no longer merely a good thing to have. It’s mandatory for anyone of any age who wants to retire someday.

Fidelity’s national online survey, conducted in February, consisted of 1,204 “adult financial decision makers” who were not retired and had at least one investment account. You can see more about the study at tinyurl.com/s5b8txwu.

If you want to engage in a dialogue about how to handle the planning process, write to me at readers@juliejason.com.

On another note, if you are interested in the basics of retirement planning, join me for a virtual presentation, “Plan for Retirement Account Withdrawals.” It will be held on Wednesday, April 21, at 1 p.m. EDT, and is sponsored by the Greenwich (Connecticut) Library. To register, go to tinyurl.com/y833adhm or contact Yang Wang, 203-622-7924, ywang@greenwichlibrary.org.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION

When the IRS changed the filing date for 2020 tax returns (from April 15, 2021, to May 17, 2021), it also adjusted some other important deadlines. It’s important to note that these deadlines have not been adjusted on the IRS website if you search by topic. Look instead at IRS Notice 2021-21 (tinyurl.com/3fye6bx9).

You have until May 17, 2021, to make 2020 contributions to your individual retirement accounts (IRAs and Roth IRAs), Coverdell education savings accounts (Coverdell ESAs), health savings accounts (HSAs) and Archer Medical Savings Accounts (Archer MSAs).

Also postponed to May 17 is the reporting of and paying the 10% additional tax on “amounts includible in gross income from 2020 distributions from IRAs.”

The deadline to provide taxpayers Form 5498, an important document related to IRAs and other retirement plans (and something that we discussed in January in relation to required minimum distribution rollovers), has been moved from May 31, 2021, to June 30, 2021. Notice 2021-21 states that penalties for those IRA trustees or issuers who fail to file the forms “will begin to accrue on July 1, 2021.”

Another deadline that moved from April 15 relates to tax preparers, particularly those who are interested in participating in the Annual Filing Season Program (AFSP) for the 2021 calendar year. They now have until May 17 to file an application. The AFSP is described by the IRS as a “voluntary program designed to encourage non-credentialed tax return preparers to participate in continuing education (CE) courses.” More information on the program can be found at tinyurl.com/yd35ckn9.

If you want to claim a refund related to your 2017 federal income tax return, the three-year window is also extended to May 17, 2021. (Under the Internal Revenue Code, there is a three-year window to claim a refund. See tinyurl.com/esxm6w.) For 2017 refunds, you have until May 17, 2021, to mail in your tax return -- be sure to properly address the mailing. If you miss this deadline, no refund. Those moneys become the property of the U.S. Treasury.

Finally, for those who are required to file IRS Form 1040-NR for 2020, which relates to foreign trusts and estates that have federal income tax filing or payment obligations, the deadline is now May 17, 2021.

What did not get postponed? The April 15, 2021, deadline for estimated tax payments. You might not think about the fact that throughout the year, taxes must be paid as taxpayers receive income. For most people, that occurs when their taxes are automatically withheld from their paychecks and are sent to the IRS by their employer. Of course, there are others who make quarterly estimated tax payments to the IRS because their income is not subject to income tax withholding. This includes self-employment, interest, dividend, alimony and rental income.

You can find more IRS updates related to Coronavirus Tax Relief at tinyurl.com/xytn939e.

On another note, the Treasury Department and the IRS announced on March 30 that they anticipated Economic Impact Payments would begin to be issued to Social Security recipients and other federal beneficiaries who do not normally file a tax return, with the majority of the stimulus payments projected to be sent electronically and received on April 7.

According to the announcement, the update applied to “Social Security, Supplemental Security Income (SSI) and Railroad Retirement Board beneficiaries who did not file a 2019 or 2020 tax return or did not use the Non-Filers tool.” The announcement went on to note that the IRS “continues to review data received for Veterans Affairs (VA) benefit recipients and expects to determine a payment date and provide more details soon.”

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION

Economic impact payments (EIP) are now reaching 127 million individuals. This is the third EIP that was just authorized (March 11) by the American Rescue Plan Act of 2021. There are some changes from the first two EIPs.

To receive a full ($1,400) or partial EIP, you cannot make more than $80,000 adjusted gross income (AGI) -- $160,000 if married filing jointly. The first and second EIPs were less strict (EIP1: $99,000 individual/$198,000 married filing jointly; EIP2: $87,000 individual/$174,000 married filing jointly, with both EIPs having possible adjustments to the amounts based on qualifying children).

Your third economic impact payment (EIP3) may arrive by direct deposit to your bank account or by mail. I heard from a reader who checked her bank account on March 24 to find a $1,400 deposit. She then checked the IRS tool “Get My Payment” at tinyurl.com/um7wjjk9, which confirmed the deposit. The tool does not report EIP1 and EIP2 payments.

If the IRS is mailing your EIP3 to you, you may get a check or a prepaid debit card (Economic Impact Payment Card, or EIP Card).

According to the IRS, paper checks will arrive in a white envelope from the U.S. Department of the Treasury. The check will look similar to a tax refund that arrives by mail, but this version will have “Economic Impact Payment” in the memo field.

Checks are easily identified as EIPs. Not so with the EIP Card. The EIP Card will arrive by mail in a white envelope that has a U.S. Department of the Treasury seal. The EIP Card inside will be a Visa debit card with the name MetaBank (the issuing bank) on the back. If you want to see what the check and the card look like, go to tinyurl.com/wprpvx53.

Before you can use the card, you’ll need to activate it. You’ll find instructions in the envelope. After you activate the card, you can check your balance online, by phone (800-240-8100) or through a mobile app (the Money Network Mobile App, found at the App Store or on Google Play). For more information, see EIPcard.com.

If, by chance, you did not receive the first two EIPs, or got less than the full amount, all is not lost. There is a procedure to apply for EIP1 and EIP2 through the 2020 Recovery Rebate Credit (tinyurl.com/wv6euhbj). You will need to know how much you received for EIP1 (see IRS Notice 1444, which was already mailed to you by the IRS) and EIP2 (IRS Notice 1444-B, which you should receive in the mail shortly). You will need this information when you file a 2020 tax return to claim the credit. You can also create an online IRS account to look up EIP1 and EIP2. See tinyurl.com/z88tmkar. It’s worth the effort.

You do not have to take action to receive EIP3. In order for the payment to reach you, the IRS relies on 2019 or 2020 tax returns filed or benefit records, such as Social Security retirement, survivor or disability benefits, Railroad Retirement benefits, Supplemental Security Income or Veterans Affairs benefits. If you don’t fall into these categories, and you did not register for the first EIP using the IRS Non-Filers tool in 2020, you will have to file a 2020 tax return. If you don’t have a Social Security number, but file a tax return with a taxpayer ID number, that will not suffice. The EIP is limited to people with Social Security numbers.

For more details on EIP3, see IRS Fact Sheet 2021-05 (tinyurl.com/46ux98bz).

On another matter, if you are interested in the basics of estate planning, join me for a virtual presentation, “Financial Planning for Retirement III -- Estate Plan.” It will be held on Wednesday, April 7, at 1 p.m. EDT, and is sponsored by the Greenwich (Connecticut) Library. To register, go to tinyurl.com/34t2c6dx or contact Yang Wang, 203-622-7924, ywang@greenwichlibrary.org.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION