In a time when the median net worth for White households is 10+ times that of their Black and Latino peers, the racial wealth gap is wide and predicted to widen in the future. But a new report holds out hope for closing the distance.

From The Annie E. Casey Foundation, “Investing in Tomorrow: Helping Families Build Savings and Assets” examines the current landscape and makes key federal policy recommendations aimed at increasing economic stability for low-income families of color in a nation where 47 percent of adults do not have enough savings to cover a $400 emergency.

The recommendations:

Increase savings limits for public benefit programs
Families who rely on public programs like Temporary Assistance for Needy Families can be disqualified for having more than $1,000 in savings. This could discourage them from putting aside what funds they are able to collect, for fear of losing their lifeline. The policy brief recommends raising that limit to $12,125, which is equal to three month’s income for a low-income four-person family. Interesting, it shows that states that have either set higher limits or done away with them completely have seen no increase in people participating in benefit programs, and in two states there are actually fewer people dependent on them.

Provide reliable, portable retirement and emergency savings accounts
The Treasure Department’s new myRA (My Retirement Account) program lets people save for their retirement via free accounts where they can invest up to $15,000 in after-tax dollars in no-risk government savings bonds—and withdraw the money penalty-free in the case of an emergency. The report proposes that Congress should publicize these accounts and make them permanently accessible via banks and employers. It also suggests that employers that don’t offer other retirement plans should automatically enroll employees.

Help more families purchase homes
Homeownership is often the fastest route to wealth. The report proposes that the federal government should boost a program that it feels is underused. Run by Housing and Urban Development, the Family Self-Sufficiency program helps people with housing vouchers or spots in public or Native American housing improve their financial stability. Participants pay more rent as their incomes rise, but increasing amounts of their payments are shuttled into an escrow account that can be applied toward buying their own homes. But of teh 3 million eligible households, just 70,000 households are currently enrolled. In addition, Congress recently expanded the eligibility to include 1.2 million Section 8 users, and the report recommends that they should be permanently included in the program. 

Create savings accounts that help build wealth from birth
Per the report, research shows that children with savings accounts are more likely to attend college and increase their earning potential. The recommendation is to create a federal universal savings program that seeds investment accounts with a deposit for every child, with larger amounts for infants born into low-income families. When they turn 18, they would be able to use the accumulated money for education, buying a home or starting a business. The organization estimates that the accounts could not only raise wealth for all Americans, but also reduce reliance on public programs and shrink the racial wealth gap by at least 20 percent.

Read the full report here.