Purpose. Saving and asset accumulation are part of the “American Dream” of most Americans; however, Americans are not preparing adequately for retirement, and wealth distribution is disproportionately towards high-income individuals. The Individual Development Account (IDA) is a tentative policy instrument to help low-income individuals to achieve their dream. In this paper, we ask the following questions: Who are the older adults participating in IDAs and what are their saving goals? What individual characteristics are associated with saving for retirement in IDAs? How does age relate to IDA saving outcomes? What individual and IDA program characteristics are associated with IDA saving outcomes among older adults?

Methods. A series of chi-square analyses and t-tests were conducted to compare differences in individual characteristics across age groups of the American Dream Demonstration (ADD) participants. In addition, another analysis compared demographic characteristics of ADD participants who chose to save for retirement to those who did not include retirement as a saving goal. Then multiple regressions were employed to investigate whether older participants saved more and more frequently than young ones when controlling individual and institutional characteristics. The first regression included only individual and institutional characteristics. Next, two models were run to test interactions. One focused on the interaction of age group by individual characteristics; the other focused on age and institutional characteristics. Finally, a multiple regression was used to find factors associated with saving outcomes within older participants.

Results. (i) Older ADD participants have many of the same group characteristics as younger ADD participants. (ii) More younger participants identified their savings goal as home purchase or post-secondary education, while a larger percentage of older participants selected to save for retirement. (iii) Age is significantly associated with whether to save for retirement, with older participants more likely to be saving for retirement. (iv) Age is positively related to better saving outcomes. (v) These relationships hold after controlling for other individual and program characteristics. (vi) When adding interaction terms into models, we find that age moderates the relationship between saving outcomes and gender, ethnicity, education, and employment status, and the relationship between saving outcomes and monthly saving targets, one of the IDA program characteristics. (vii) Within older ADD participants, African Americans saved significantly less than Caucasians, more financial education and higher monthly saving targets significantly increased saving performance.

Implications. Two findings in this study are paramount. First, older participants are more successful savers than younger participants. Second, IDA program characteristics have significant relationships with saving outcomes among older participants. These two findings together suggest that IDA programs may be a successful means of enabling low-income older adults to save, and that the design of the IDA program may be important for ensuring success. Based on results from this study, there is reason to believe that asset-building policies that include or are targeted to older adults, if appropriated designed, can be successful.