State Policy Options for Building Assets
States can help households build assets by changing benefit rules that penalize saving, creating automatic saving systems, funding children’s accounts, and improving access to homes and small-business capital. Each option reaches different people, requires different administration, and carries different costs.
Asset-building policy covers both short-term financial security and long-term ownership. Savings can help a household absorb an emergency. Retirement accounts, education savings, homes, and businesses can support longer-term asset formation.
This page separates the July 2006 issue brief from current policy information. It uses the historical report to establish the subject and bibliography, then uses current official sources for present-day examples.
Why state asset-building policy matters
State asset-building policy can reduce barriers to saving and create practical ways for households to accumulate assets. A state may change program eligibility rules, provide automatic accounts, make initial deposits, or support access to home and business ownership.
Current asset-building statistics and evidence show why both emergency savings and long-term assets matter. In the Federal Reserve’s 2025 household survey, 63 percent of adults said they could cover a $400 emergency expense with cash or its equivalent. Only 35 percent of non-retirees thought their retirement savings were on track.
Those figures do not measure the effect of a particular state program. They show that short-term liquidity and long-term saving remain separate policy concerns.
State policy options at a glance
States have several distinct policy options for building assets. The main choice is whether to remove a barrier, create a saving system, provide public funds, or improve access to ownership capital.
| Policy lever | Possible state action | Main design question |
|---|---|---|
| Benefit asset rules | Raise or remove an applicable asset limit | Which programs and households are affected? |
| Workplace retirement | Provide automatic payroll saving with an opt-out | Who is covered and who administers the accounts? |
| Children’s accounts | Provide automatic deposits or targeted seed capital | Is eligibility universal, targeted, or combined? |
| Homeownership | Offer down-payment assistance | How are affordability and ownership risks addressed? |
| Business ownership | Support lending, guarantees, equity, or technical assistance | Which businesses receive support and how is performance measured? |
These options can be combined, but they should not be treated as interchangeable. Removing an asset limit protects savings that a household already has. An automatic account changes access and participation. A public deposit or credit program directs state or federal funds toward a defined ownership goal. The asset-building initiatives and organizations directory provides related program and organization context.
Remove rules that penalize saving
States can raise or remove asset limits when the governing program gives them that authority. This can let eligible households retain modest savings while receiving assistance instead of requiring them to spend those savings first.
Current federal SNAP regulations state that categorically eligible households do not have to meet the program’s regular resource limits. A 2024 U.S. Government Accountability Office report found that, as of January 2024, 44 states and other jurisdictions used broad-based categorical eligibility for SNAP. Forty of those 44 did not limit assets.
The relevant authority and implementation work differ by program. Policymakers must identify which rules the state controls, which households are affected, and what changes are needed in notices, applications, eligibility systems, and staff procedures.
Make saving automatic and start accounts early
States can make saving easier by providing automatic workplace retirement accounts and opening accounts for children without requiring families to start the process themselves. Automatic participation can still preserve a worker’s ability to opt out or change contributions.
CalSavers is a current state example. It provides an automatic-enrollment individual retirement account for workers whose employers do not sponsor a retirement plan. California oversees the program through a public board, while private financial firms manage the investments.
Children’s programs use several designs. CalKIDS provides an account for every eligible California newborn and adds larger awards for specified groups of public-school students. Connecticut Baby Bonds automatically invests $3,200 for children whose births are covered by the state Medicaid program. Eligible participants may claim the funds from age 18 through 30 for approved uses such as a home, education, a business, or retirement. The UK Child Trust Fund historical record provides an earlier universal child-saving example. These programs show the choices between universal and targeted eligibility, small and large deposits, and restricted and unrestricted uses.
Support homeownership and business ownership
States can support ownership by reducing financing barriers for homebuyers and small-business owners. The main design issues include eligibility, the amount and form of assistance, repayment terms, administration, and the financial risk carried by the household.
The U.S. Department of Housing and Urban Development confirms that state and local governments offer programs that help with down payments. Such programs can address an upfront cost that prevents some households from purchasing a home. Policymakers still need to consider continuing housing costs and whether the purchase remains affordable after assistance is provided.
For business ownership, the U.S. Treasury’s State Small Business Credit Initiative provides federal funds that states and other participating jurisdictions use for locally designed programs. Available mechanisms include loan participation, loan guarantees, collateral support, capital-access programs, and equity or venture-capital investments. Business ownership carries the risk of loss, so access to capital should be assessed alongside financing terms and business performance.
Choose, fund and evaluate a policy
Policymakers should compare state asset-building options by the people reached, legal authority, public cost, administrative work, participant control, and intended household result. A policy with high enrollment may still produce limited asset growth if deposits are small, participation is brief, or withdrawals do not support the stated purpose.
Questions to answer before adoption include:
- Which households are eligible, and are they enrolled automatically or through an application?
- Does the policy protect existing savings, create a new account, or provide capital for a purchase?
- Who owns and controls the account or asset?
- What state funding, federal funding, employer activity, or private administration is required?
- Which fees, withdrawal rules, debt obligations, or investment risks affect participants?
- Which measures will show participation, balances, persistence, approved uses, administrative cost, and household results?
Evaluation should separate reach from results. Enrollment shows how many people entered a program. Account balances, continued participation, withdrawals, debt, ownership retention, and administrative cost provide different information about whether the policy met its stated purpose.
About the 2006 issue brief
The historical source was a July 2006 issue brief for state policymakers and advocates. It presented state-level policy options and was intended to complement New America’s federal policy-options paper, The Assets Agenda. Its title and purpose remain relevant, but its policy descriptions should not be read as a statement of current law or current program availability.
The full historical citation is: Leslie Parrish, Heather McCulloch, Karen Edwards, and Gena Gunn. State Policy Options for Building Assets. CSD Report No. 06-31. St. Louis, Missouri: Washington University, Center for Social Development, 2006. DOI: 10.7936/K71J9997.
The archived AssetBuilding.org PDF establishes the historical record. It has not been republished on this page. The analysis above is original and uses current sources for present-day policy information.