Low-wage jobs can be unstable, leaving families struggling to cope with employment gaps and financial emergencies that can strike without warning. About four in five low-income families are "asset poor," lacking enough liquid savings to live for three months at the federal poverty level without earnings. In this essay, McKernan and Ratcliffe suggest a cluster of policies that would improve financial markets and savings opportunities for low-income families across the life cycle.

Nearly one quarter of low-income families do not have a checking or savings account, more than one-third do not own cars, 60 percent do not own a home, and 90 percent have no retirement account. In contrast, the typical middle-income family has checking or savings accounts, retirement accounts, owns a car and a home. This brief synthesizes current research on the assets and liabilities of low-income families into a variety of portraits and provides suggestions for future research and policy.

Financial assistance from family and friends is an important resource for lower-income families dealing with difficult economic circumstances. This fact examines what percent of respondents in low-income neighborhoods gave financial help, either to family and friends or to other people they live with, in the last 12 months. The percentage of respondents who gave financial help is high 39 percent, with substantial variation within immigrant and U.S.-born respondent groups by race and ethnicity in the proportion that gave and where the assistance was sent

In the second fact we examine what percent of respondents in low-income neighborhoods received financial help in the last 12 months from families and friends or from other people they live with. Overall, 25 percent of respondents received financial help from families and friends. This figure differs substantially by nativity. Moreover, the patterns of receiving help from family and friends are fairly similar across race and ethnic groups for U.S.-born respondents, whereas the percent of immigrant respondents who received help from family and friends differed sizably among region of origin.

According to the federal government, elderly poverty rates among blacks are nearly triple and among Hispanics are more than double those of whites. Data from the 2004 Health and Retirement Study on adults age 65 and older, living alone or with only a spouse, show how assets, which are excluded from the official poverty measure, change elderly poverty overall and between racial/ethnic groups. Adding imputed housing rent and annuitized asset values to resources reduced overall poverty by 1.8 percentage points, but increased racial disparities because blacks and Hispanics have relatively little housing equity or financial assets.