The Benefits and Challenges of Investing Accounts in Riskier Assets During Accumulation
The Benefits and Challenges of Investing Accounts in Riskier Assets During Accumulation
In prior research, Morningstar showed how income-based program designs for baby bonds could close the racial wealth gap across multiple measures of wealth. In this paper, we examine the range of possible outcomes if the contributions are invested in riskier assets during those 18 years in which money contributed to the account cannot be withdrawn.
What's Inside
What's Inside
- How baby bonds could narrow the racial wealth gap even faster when invested in riskier assets
- How even in a down market, the gap in wealth per minor child between Black and white households would shrink by a third
- What decisions policymakers would need to make regarding either focusing on larger balances or creating more equity