To Save, or Not to Save?

Millions of low-income Americans are hearing two conflicting messages from their government: Save, and don’t save. Over the last decade a consensus has been emerging among researchers, policymakers, and practitioners around the importance of enabling low-income persons to save and build wealth, and state and federal programs have emerged to do just that. Yet, with limited exceptions, the rules of our nation’s public assistance programs aimed at such persons – Food Stamps, Medicaid, and TANF, for example – send the exact opposite message: Don’t save. For reasons of equity, administrative ease, and enabling the poor to achieve economic security, these outdated asset limits should be revised or repealed while still employing other means – namely, an income test – to ensure that public assistance reaches only those who need it.

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