At what age do you plan to retire? According to a recent Gallup poll, the expectation of the average American is that it’s going to be around age 67, a significant increase from the mid 90s, when most people assumed age 60.

It’s no surprise that the shift in expectations resulted from the recent shocks to the economy, including the recession, the financial crisis, the housing bust and stock market volatility. There are also rising concerns about the long-term viability of Social Security and Medicare.

I was invited to attend a play at Somerville High School yesterday called, "Money Matters." Produced by the Underground Railway Theater, the theater-in-residence at Central Square Theater in Cambridge, the production was written by its 16 youth members as part of a Cambridge Savings Bank-sponsored financial education initiative.

The young actors and actresses took part in CSB’s Smart Financial Education Program to help them understand some money managing basics, and then went out and interviewed at least 80 individuals of various ages, ethnicities and professions to get their thoughts on key money issues.

The students took actual quotes from the interviews and wove them together into a series of conversations that talked about everything from spending one’s paycheck every week ("I love the feeling of having made a purchase, but I hate the feeling of having no money ...") to the fiscal inequities that people sometimes face when they go to college. ("Economic diversity is something that I have to learn to live with … I’m at college and I care about community, but where does caring about community end?")

The storylines were linked together by one central character – the tooth fairy – who was prompting the conversations by engaging in a “tooth fairy stimulus package.” Each character received $100 per tooth and then the tooth fairy watched their responses and actions to having the money.

Why the tooth fairy? According to the organizers it was because across the board, people who were interviewed said that their first memory of dealing with money was when the tooth fairy paid them a visit. The tooth fairy was also apparently the cause of a lot of discussion about money and equity since many people had different opinions, and experiences, about the value of a tooth.

While the play was interesting, what really caught my attention was the Q&A period after. The kids in the audience needed a little prompting to talk about the topics brought forward, but it was interesting to hear what had made an impression on them. One student said that she had never really understood the difference between a debit and a credit card, and the impact that interest can have on one’s budget.

“The world of credit is a mysterious world to kids of this age,” said Evan Diamond, an assistant vice president and Financial Education Program Manager for Cambridge Savings Bank. “They need to understand that every time you get a credit card you are taking out a loan. Showing them how much interest you will pay if you fall into the trap of minimum payments is a real wake up call.”

Several other students said they were struck by a monologue about a student who went to Haiti and learned the meaning of money for survival’s sake as opposed to just pure spending.

“We try to connect the emotions with the action” through the community program, Diamond said.

CSB started its Smart Financial Education Program in 2010 in response to the financial crisis, Diamond said. The bank has a team of educators who visit schools as well as a variety of community centers to provide an overview on a core curriculum of four modules: Budgeting and Saving; Managing a Checking Account; Credit Smarts; Fraud Smarts. They also customize their classes to fit a particular area, for example they might discuss finance to students interested in entrepreneurship and business, or they might discuss interest rates and mathematics concepts in a math class.

The team has taught more than 300 sessions, reaching 4,6000 participants at high schools in towns including Lexington, Arlington, Belmont and Concord, as well as non-profit groups such as the Community Learning Center in Cambridge and the Somerville Homeless Coalition. This spring they’ll be reaching out to kindergartners at a variety of schools in order to encourage kids to think about saving starting at a young age. Diamond emphasized that the group does not provide promotional materials on CSB at these events since “we don’t do this to sell accounts.”

“Managing money is tricky,” Diamond said. “It’s nice to be able to give them good advice.

“Here we go again.”

It’s that kind of skepticism that Bankrate.com financial analyst Greg McBride said might undermine the economy as consumers once again grapple with high gas prices -- and the ripple effect that has on household incomes. With salaries generally not keeping pace with rising expenses, people’s spending power is being squeezed, undermining their confidence in an economic turnaround.

Consumer spending is critical to the recovery since it powers 70 percent of economic growth, McBride said. This month’s Bankrate.com Financial Security Index dipped down after posting some gains at the end of last year, illustrating the insecurity that the more than 1,000 Americans polled felt about their debt, net worth, job security, savings and overall financial situation.

A recent study by the investment management company Vanguard Group found that almost one in four 401(k) participants are investing in only target-date funds, a six-fold gain over the past five years. The increase reflects a growing number of new participants: Vanguard said that of those employees entering a retirement program for the first time, 64 percent opted to invest in a single target-date fund.

Target-date funds are a type of mutual fund that allows investors to set a date for the life of the fund. As retirement approaches, the fund shifts its emphasis from more aggressive investments to more conservative ones based on the target date.

Many companies are choosing target-date funds as a default investment option, and automatically enroll eligible employees into them if an individual doesn’t voice a preference. In general, Vanguard said that the move to target-date funds illustrates how there is growing reliance on “professionally managed accounts” in which a fund manager or third-party advisor makes portfolio allocation and rebalancing decisions on investors’ behalf.

Fidelity Investments today announced a new iPad App that allows investors to make a mobile deposit directly into their Fidelity IRA accounts. Investors can take a picture of a check with their iPad camera and immediately send it to Fidelity for deposit into a traditional or Roth IRA.

Grant Thornton, an international tax advisory and consulting firm, offered some tips and reminders for this year’s tax season – and, looking forward, some advice on things to think about as you plan for next year. I found the information on the mortgage interest deduction helpful. There’s also a few items for small business owners included. Take a look:

For your personal finances:

What’s new for 2011?

1. You can deduct interest on a mortgage of up to $1.1 million – For many years, courts and the IRS interpreted the tax code to limit your deduction to the interest on up to $1 million in debt used to buy, build or improve your home, while allowing you to deduct interest on an additional $100,000 in home equity debt only if it was not used to acquire the home. So you could deduct interest on up to $1.1 million in mortgage debt only if $100,000 was not used to purchase or build the home. The IRS recently changed its position and has now ruled that debt used to buy, construct or improve a home can be treated as both acquisition and equity indebtedness. This means you can now deduct $1.1 million in mortgage interest even if all of it was used to purchase or build the home.
2. Payroll tax deduction – The employee portion of the Social Security tax was reduced in 2011 from 6.2 percent to 4.2 percent. This lower rate applied all the way up to the Social Security wage limit of $106,800, and employers reduced withholding accordingly. If you’re self-employed, your self-employment taxes were also lowered from 15.3 percent to 13.3 percent on income subject to Social Security. But this reduction does not affect the deduction for self-employment taxes on your 2011 tax return.

Self employed or running a small business? Use the upcoming tax deadline as an opportunity to also evaluate your retirement program

I worked for a large company for more than a decade and during that time was religious about contributing to my 401(k). So when I struck out on my own and started my business, it was important to me to set up a system that continued those regular retirement contributions.

It was one of those times when I realized how much I had taken the big-company infrastructure for granted. As a business owner, there are several options available, and each one offers different features from either a tax perspective or an administrative one. My goal was to first find the best plan for my immediate situation, and understand the nuances of any tax or investment issues, and then come up with a course of action for retirement planning that could grow as my company grows,

With the tax deadline just a month and a half away, it’s time to re-assess retirement plans so that you can take advantage of any contributions and other benefits your program may offer, whether you’re self-employed or work for a large company.

For small business owners, that assessment may also mean investigating whether the plan you have still fits your business needs. Consider this: A recent Fidelity survey of more than 600 small business owners who already offer SEP-IRA, SIMPLE IRA or Self-Employed 401(k) plans found a significant lack of understanding among owners of the plans they currently have.

As a follow up to yesterday’s story about love and money, here are some tips for couples to think about when managing money together, and some common mistakes to watch out for, from Irvin Schorsch III, founder and president of Pennsylvania Capital Management, which has about $620 million under management.

Tips:

Create a Common Vision: Couples cannot plan for the future if they can’t decide on what their future will hold. Will both spouses work? How many children does a couple anticipate on having? Does either spouse wish to go back to school for an advanced degree? What do they envision retirement to look like? The sooner those questions are answered, the better off the couple will be.

Delegate: Once a financial “game plan” is put into place, it’s important to to determine which spouse will handle the variety of financial responsibilities within a household. Tasks/projects should be given to the spouse who is best suited to them, so that each spouse feels they’re contributing effectively.

Maximize All Contributions: Does one spouse receive a handsome employer match to any 401(k) contributions? If so, it’s important to maximize that contribution, even if it means living on one spouse’s income for a period of time. The sacrifice will be well worth it, especially if it helps build a large nest egg earlier in life.

Participants in Fidelity 401(k) plans inched up the amount they were willing to save for retirement last year, bolstered by employer contributions and the rising acceptance of Target date funds, the Boston-based financial services company said.

If you work for a company with a pension plan that uses Fidelity Investments for its record keeping, you may be able to access some new online tools for understanding and managing retirement.

Fidelity, which provides pension plan services to 108 companies, announced a new online video library that helps pension plan participants better understand their benefits, and how to incorporate them into an overall retirement plan. The videos explain such topics as the difference between a 401(k) plan and a pension, and how pension benefits grow. Located in the Pension & Tools Learning section of Fidelity's NetBenefits site, the videos also cover vesting and retirement eligibility so that people can learn how to integrate their pension into a retirement income strategy.