|
| Thursday, June 07, 2007 |
| Poor in US punished for saving money, study says |
The Boston Globe article: Poor in US punished for saving money, study says was rather interesting. In Massachusetts, for example, anyone with assets of $2,500 or more is disqualified from receiving federal assistance to families with dependent children. That asset test includes retirement accounts and even the cash value of a life insurance policy, the report says.
As a result, a single parent with two children who earns $500 a month would lose $133 a month in benefits if the family saved more than a nominal amount for retirement.
"People start saving, thinking that they are going to be treated fairly, and then they get clobbered. They don't know what happened," Kotlikoff said. "There are ways to achieve our objectives without kicking people in the head if they try to work and save." |
| posted by Boston Gal @ 10:15 AM *
* Subscribe to Boston Gal's Open Wallet |
Links to this post:
|
| 6 Comments: |
-
I'd be interested in seeing the number of folks that make $500 a month AND save money. Not that it's not possible, I'm just wondering how common that is.
All I can say is that if I'm only making $500 a month in Massachusetts, I'd better be looking for another job. Especially if I have kids.
-
I agree that it's unfortunate that some honest folks are being 'punished' for saving. But they have to use an asset test to weed out folks who are abusing the system. At one point in time, people were being encouraged to spend down all of their retirement assets to qualify for Medicaid. And they were receiving free long term care when they should have been paying for it themselves. So, I don't think it's wrong to have an asset test, but perhaps they need to bump up the $2,500 threshold?
-
The opening statistic is pretty scary: for low income families, saving $1 will cost you $2.60 in higher taxes and lost benefits.
I hope this study gets some press among people look down on the poor for being "irrational" with their money. Turns out they've been extremely rational not to save, at least in Massachusetts.
-
I say save your money under the mattress
-
I am sure a lot of them do save "under the mattress". The poor are most likely to be "unbanked" in the US.
-
Bronx Chica...do the people who do these study include themselves and family? These studies are a bunch of crap!
|
| |
| << Home |
| |
|
|
|
|
I'd be interested in seeing the number of folks that make $500 a month AND save money. Not that it's not possible, I'm just wondering how common that is.
All I can say is that if I'm only making $500 a month in Massachusetts, I'd better be looking for another job. Especially if I have kids.