WEBSTER CITY, Iowa — Families could get 401(k) retirement accounts and up to $1,000 in annual matching funds from the government under a plan offered today by a Democratic presidential candidate, Senator Clinton.

At a cost of between $20 billion and $25 billion a year, the plan is Mrs. Clinton’s largest domestic proposal other than her plan for universal health insurance. The New York senator said it would be paid for by taxing estates worth more than $7 million per couple and would help narrow the gap between the rich and those who don’t have enough savings for retirement.

At the same time, Mrs. Clinton said she has given up another idea for a savings incentive — giving every baby born in America a $5,000 account to one day pay for college or a first home.

She made that suggestion last month before the Congressional Black Caucus, saying it was just an idea and not a policy proposal. The idea was criticized by Republicans, and she told The Wall Street Journal in an interview published today that it’s off the table.

The campaign of a Democratic rival, John Edwards, suggested it was an example of Mrs. Clinton setting her positions by polls. “Apparently, new polling data seems to have pressured the Clinton campaign to throw out the baby bond with the bathwater,” an Edwards spokesman, Chris Kofinis, said.

As for the retirement accounts, Mrs. Clinton said during a campaign stop in small-town central Iowa, “They will begin to bring down this inequality that is eating away at our social contract.” She said, “This is a major commitment to how I believe we can begin to right the balance again.”

Her campaign said that for every $7 million estate that gets taxed, at least 5,000 families would receive the matching funds.

Mrs. Clinton said she wants to create “American Retirement Accounts” in which each family could put up to $5,000 annually in a 401(k) plan. The federal government would provide a tax cut to match the first $1,000 for any household that brings in less than $60,000 a year and 50% of the first $1,000 for those that make between $60,000 and $100,000.

Her campaign said the accounts would be designed for adults of working age and not open to children, but that it wouldn’t be a requirement that people work to participate. The matching funds would come in the form of a refundable tax credit that would be deposited into the 401(k) plan.

Higher income earners who don’t have employer-sponsored plans could participate, but contributions to the accounts would count against the IRA contribution limit.

She said she would encourage employers to have direct deposit from paychecks into the accounts.

Mrs. Clinton said less than half the families in America have retirement savings accounts and those who have them aren’t saving enough. She said she often meets people working even into their early 80s because they don’t have enough savings.

“We don’t have much of a nest egg to fall back on,” she said.

Although the money would be intended mainly for retirement, she said people should also be able to use the savings to buy a house or pay for college and the government should consider letting workers use a portion for hard times like an illness or accident.

Mrs. Clinton said the accounts should not be used to replace any part of Social Security and that she is committed to addressing the long-term challenges of that program.

“We have to fight and finally bury the idea of privatizing Social Security,” she said.