D2D Fund

More than three-quarters of the nation’s taxpayers receive tax refunds each year. In 2005, the average refund was $2,171—for many low to moderate income households, this is the largest sum of cash they will receive all year. To encourage individuals and families to make the best use of their refund, the Internal Revenue Service (IRS) has created a new program to allow taxpayers who use direct deposit to send it to multiple accounts.

Policy-makers from both sides of the political aisle are actively seeking ways to encourage retirement saving among middle- and low-income households. A growing body of evidence suggests that making it easy for these families to save, and presenting them with clear and effective financial incentives to do so, succeeds in generating significantly higher contributions to retirement accounts.

The trend towards promoting asset accumulation among the poor has been gaining steam in recent years due to the emphasis on asset-building as a means to lift the poor out of poverty. This trend is a result of greater focus on the increasing wealth gap between high-income groups and low-income groups.