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Asset Building and Low-Income Families | Fact Sheet

Asset-Building and Low-Income Families

A QUICK LOOK AT U.S. HOUSEHOLDS AND THEIR ASSETS

 

Source: Asset Building and Low-Income Families, edited by Signe-Mary McKernan and Michael Sherraden, Urban Institute Press, 2008. Unless otherwise indicated, all statistics are for 2004.

Most common financial assets in the United States: checking and savings accounts
Percentage of all families with a checking or savings account: 91
Percentage of families in bottom-fifth income ranking with a checking or savings account: 76
Median dollars in these accounts, all families: 3,800
Median dollars in these accounts, bottom-fifth families: 600

Most valuable financial asset in the United States: a retirement account
Percentage of all families with a retirement account: 50
Percentage of bottom-fifth families with a retirement account: 10
Median dollars in these accounts, all families: 35,200
Median dollars in these accounts, bottom-fifth families: 5,000

Most common nonfinancial asset in the United States: a car
Percentage of all families with a car: 86
Percentage of bottom-fifth families with a car: 65

Most valuable nonfinancial asset in the United States: a home (any kind of dwelling)
Percentage of all families that own a home: 69
Percentage of bottom-fifth families that own a home: 40
Median dollar value of home, all families: 160,000
Median dollar value of home, bottom-fifth families: 70,000

Median total debt, in dollars, held by homeowners: 95,800
Median total debt, in dollars, held by home renters: 7,800

Percentage of all families with debt greater than 40% of income: 12
Percentage of bottom-fifth families with debt greater than 40% of income: 27
Median net worth, in dollars, of bottom-fifth families: 7,500
Median net worth, in dollars, of middle-fifth families: 71,600
Median net worth, in dollars, of top-fifth families: 617,600
Growth in median net worth of bottom-fifth families, 1992–2004: 44% ($2,300)
Growth in median net worth of top-fifth families, 1992–2004: 94% ($298,500)

Percentage of asset-poor families1 in 1984 still so in 1994: more than 60
Percentage of income-poor families in 1984 still so in 1994: 42
Total assets of families in lowest income quintile compared to middle fifth’s: 1:9
Total assets of families in lowest income quintile compared to top fifth’s: 1:48
Average assets, in dollars, of families headed by one adult: 83,400
Average assets, in dollars, of families with married or cohabitating adults: 265,800

Percentage of bottom-fifth dads whose sons remain in bottom fifth when they grow up: 42
Percentage of top-fifth dads whose sons fell to the bottom fifth: 5
Percentage of bottom-fifth sons who reached the top fifth: 5

Federal tax breaks, in dollars, subsidizing assets (fiscal 2008 estimate): 407 billion
Percentage of subsidies going to top-fifth families (fiscal 2005): nearly 90
Percentage of subsidies going to bottom three-fifth families (fiscal 2005): less than 3

Potential way to include low-income families in savings incentives: replace tax deductions (e.g., for mortgage interest) with refundable tax credits

1 A family is asset poor if it does not have enough to live on for three months at the federal income poverty level.

 

Asset Building and Low-Income Families, by Signe-Mary McKernan and Michael Sherraden, is available from the Urban Institute Press (ISBN 978-0-87766-754-4, paper, 300 pages, $29.50)

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