by Patriotic Millionaires | 4.29.19
It’s getting harder and harder to save money. With stagnant wages that aren’t keeping up with inflation and soaring housing prices, a dollar just doesn’t go as far as it used to, and Americans are spending more and more of their paycheck every month. For anyone who’s not already rich, this makes it nearly impossible to build wealth, let alone pass it on to their children. This is especially true for communities of color -- median black household net worth is about one-tenth that of a white household.
The American Opportunity Accounts Act, introduced by Senator Cory Booker, would create a savings account account for every newborn seeded with $1,000, and the government would add to the account every year until the child turns 18. Children from the poorest backgrounds would receive the largest annual deposits ($2,000), for a total balance of around $46,000 including interest when they reach adulthood. At that time, recipients would be able to access the funds for specified purposes, including education, homeownership, and retirement.
Baby bonds can help level the playing field. By creating savings accounts for newborns, we can make sure that all Americans have access to critical wealth-building opportunities like higher education and homeownership once they reach adulthood. These modest investments could go a long way toward enabling children from poor backgrounds to access wealth-building opportunities otherwise out of reach.
Written by Patriotic Millionaires
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