Purpose
Matched IDA savings accounts are typically restricted to three uses:
- purchasing a first home;
- pursuing post-secondary education;
- starting or expanding a small business.
IDAs reward the monthly savings of working-poor families who are trying to buy their first home, pay for post-secondary education, or start a small business. Additionally, some IDA programs allow participants to save for home repairs, computers, automobiles, or retirement. These matched savings accounts are similar to 401(k) plans and other matched savings accounts but include flexibility save for a range of asset investments.
While anti-poverty policy makers have traditionally focused on issues of income and consumption, an expanded vision of poverty alleviation has emerged in recent years - one that encourages savings, investment, and asset accumulation in conjunction with, not instead of, traditional anti-poverty programs. Assets play a vital role in poverty alleviation by providing not only economic security but also a psychological orientation that encourages low income families to save and plan for the future.
Read more about this topic: Individual Development Account
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