Reply #16: Individual Development Accounts (IDA).....I really need to read about this

[madfloridian]

http://www.ndol.org/ndol_ci.cfm?contentid=3608&kaid=139&subid=277

I am not sure I understand it at all. They are in lieu of what? What do we give up for them?

SNIP..."When the gap between the rich and the poor is discussed, most tend to think of income and ignore the issue of personal assets. While a substantial income is vital for daily survival, true advancement and financial security comes from accumulating savings and building wealth. Savings can provide people with a personal stake in the economic mainstream and give them the financial cushion necessary for upward mobility. For many low-income Americans, however, building savings can be very difficult, and accumulating enough savings to buy a home, finance a business, or pay for schooling may be well out of reach. (Hell, yes, it can be hard. )

Individual Development Accounts (IDAs) are one innovative way to help low-income families accumulate sufficient savings to meet these goals. IDAs were first proposed by Washington University Professor Michael Sherraden in a report published by the Progressive Policy Institute in 1990. Under a typical program, IDA participants open up savings accounts in which their deposits are matched at a rate determined by the sponsoring organization. The matching dollars, which are provided by government or private sources, can vary from as little as 50 cents for every dollar saved to as much as five dollars. IDA programs are often coupled with classes in financial literacy. In 1993, Iowa became the first state to pass legislation in support of IDAs. Since then, 29 states and the District of Columbia have passed similar laws, and others have legislation pending....."

This sounds really really good, but I taught at a school where people wre so poor this would not even be feasible. What would these folks give up for these IDAs. Are these an alternative to Medicaid? An alternative to what?