Government Can Do More to Encourage Families To Save
Suzanne Potter / California News Service
SACRAMENTO, Calif. – Families that are struggling to save money for emergencies, for college and for retirement, could benefit from a few small changes in government programs according to a new policy brief released this week.
The brief, from the Annie E. Casey Foundation, is called “Investing in Tomorrow: Helping Families Build Savings and Assets.” Beadsie Woo, senior associate with the Casey Foundation, says the federal government should create a universal savings account when each child is born, and seed it with a small amount of money to get families started saving.
“There are commonsense federal policies that can create more opportunities for families to save,” says Woo. “And those change the life course for their children. Children whose families can save will do better in school and have stronger outcomes through access to opportunities.”
According to the Public Policy Institute of California, more than 40 percent of families in the Golden State live in or near poverty and compared to whites, Latinos are twice as likely to be poor, while African Americans have about one and a half times the poverty rate of whites.
The policy brief says the Temporary Assistance for Needy Families program cuts people off if they have too much in savings. The asset limit in California is $2,250. But Woo says the federal government should set a minimum limit of $12,125 which equals three month’s wages for a low-income family of four so they can develop a cushion.
“We see that those families are more self-sufficient because they have their own savings to draw on. Over time, the number of people enrolled in benefits decline,” says Woo.
The policy brief also recommends the government do a much better job of promoting entry-level retirement accounts called MyRAs and should help more eligible families become homeowners through the federal Family Self-Sufficiency Program.
