All Asset-Related Research | Opportunity & Ownership Project

Presentation to the National Tax Association briefly covers some of implications of Roth accounts and their increased availability in 2010. It points to the negative budget consequences and some of the tax inequities that result-but also to the advantages to some individuals of converting some of their retirement assets in Roth accounts.

Family events, such as a job loss, the onset of health limitations, and a change in family structure, can adversely affect family well-being. The impact of these events may be mitigated if the family holds assets that can be used to maintain consumption. Using the SIPP, this study examines the role of assets in families' economic stability. We find that families in all parts of the income distribution experience material hardship after a negative event. Further, in the aftermath of a negative event, asset-poor families experience more hardship than non-asset-poor families, with assets helping most for low- and middle-income families.

Many commentators have worried about the low savings rates and high debt levels of American families. Does this picture of unbridled consumption and low asset accumulation fit the American family? Did declines in 2008-2009 house prices, stocks, and bonds reinforce stagnating wealth or offset previous growth in wealth? Using data from the 1989, 1998, and 2007 Surveys of Consumer Finances (SCF) to replicate family experiences over the life cycle by following age cohorts, this fact sheet shows that from 1989 to 2007 American families were accumulating wealth at a healthy rate as individuals and families moved through their life cycle.

The one-third drop in the S&P 500 index between year-end 2007 and 2008 raises concerns about retirement security since Americans now hold more equities through their retirement plans. Those near retirement will fare the worst because they have no time to recoup their losses. Midcareer workers will fare better because they have more time to rebuild their wealth. They may even gain income if they buy stocks at low prices and get above-average rates of return. High-income groups will be the most affected because they are most likely to have financial assets and to be invested in the stock market.

Six new briefs from the nonpartisan Urban Institute show how Americans have fared during and after downturns since the 1970s, what might be ahead, and how government programs aid those in distress.