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Didn't get $1,400 stimulus checks? Took money from retirement accounts? Q&A with readers

Erin Arvedlund, The Philadelphia Inquirer on

Published in Home and Consumer News

Graham O’Neill, director of Campaign for Working Families in Philadelphia, gave similar advice, noting that as of March 5, the IRS still had 2.4 million tax returns that came in before 2021.

“Even if the 2019 return is processed at this point, it will not get them the first ($1,200) or second round ($600), although it should trigger release of the third round ($1,400).

"At this point, their only real recourse is to file a 2020 return where they can claim the missing first two payments and trigger the release of the third," O'Neill said.

Taxpayers can check their 2019 Account transcript and 2019 Tax Return transcript online: https://www.irs.gov/individuals/get-transcript.

Also, the Campaign for Working Families and VITA/Temple University offer free tax-filing help around Philadelphia.

Q: "Did many investors take money out of their retirement funds due to COVID? If so, how do I catch up after the pandemic?"

 

A: Three in 10 (31%) Americans withdrew or borrowed money from retirement accounts during the pandemic, mostly to cover basic living expenses, according to a January survey of older workers by Kiplinger's and Personal Capital.

The CARES Act, passed by Congress in March 2020, allowed hardship withdrawals of up to $100,000 from a retirement account through Dec. 31.

Fidelity and Vanguard witnessed money flowing out. More than eight in 10 Americans (82%) said events of the past year affected retirement plans, Fidelity reported. One-third estimated it will take two to three years to get back on track, due to such factors as job loss or retirement withdrawals.

About 1.6 million Fidelity clients withdrew a total of $32 billion between April and December through CARES Act distributions. That represented 6.3% of retirement plan participants at Fidelity. The median totaled $2,500, the average $9,400, and roughly 51,000 people withdrew the full $100,000.

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