Savings/Savings Rate

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Low-wage jobs can be unstable, leaving families struggling to cope with employment gaps and financial emergencies that can strike without warning. About four in five low-income families are "asset poor," lacking enough liquid savings to live for three months at the federal poverty level without earnings. In this essay, McKernan and Ratcliffe suggest a cluster of policies that would improve financial markets and savings opportunities for low-income families across the life cycle.

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New computer simulation analysis by the nonpartisan Employee Benefit Research Institute (EBRI) provides the most realistic estimates yet conducted of how much savings are needed to cover health expenses in retirement, taking into account such major factors as gender, marital status, age, and whether your former employer provides any help with retiree health insurance.

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Despite decades of significant tax subsidies for pensions and retirement accounts, most Americans retire with little or no pension saving. This paper suggests that it is possible to create a "Super Simple" saving plan that would provide a basic, low-cost, easily administrable plan with the potential to increase significantly the retirement assets available to moderate- and middle-income individuals. This plan follows the lead of a new system about to be implemented in the United Kingdom, which features automatic contribution for… more

Restrictive asset limits in means-tested programs may unintentionally discourage families from saving. This brief presents an empirical analysis of how asset tests affect families' asset holdings. The findings suggest that more lenient asset tests and more generous IDA program rules can lead families to increase their asset holdings. Relaxed vehicle asset limits, for example, are associated with increased vehicle ownership. Since people often need a reliable car to get to work, this finding suggests that exempting at least one vehicle… more

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