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Only 8 Percent of Grandparents Are Likely to Talk with Grandchildren about Money and Saving for College, While 85 Percent of Young Adults Say They Are Open to the Conversation
TIAA-CREF Intergenerational Study Finds Grandparents Vastly Underestimate the Influence They Have on Grandchildren’s Financial Futures
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NEW YORK, August 5, 2014 — One of the most important ways grandparents can positively impact their grandchildren’s saving and spending habits has nothing to do with writing a check. According to a new TIAA-CREF study, conducted by an independent research firm, only 8 percent of grandparents say they are likely to start a conversation with their grandchildren ages 18 and younger about money and the importance of saving for college. However, 85 percent of young adults say they are open to talking with their grandparents about money and saving. The findings reveal that grandparents have a big opportunity to make a positive impact on their grandchildren’s future financial success by simply talking to them about money.

The study, conducted in March and April 2014, included focus groups, one-on-one interviews and online surveys of grandparents age 50 and older and grandchildren age 18 to 24.

Grandparents Underestimate Their Influence; Grandchildren Value Their Stories

According to the study, only three in 10 grandparents think they can influence their grandchildren’s money habits. Yet 73 percent of young adults indicate their grandparents actually do influence their saving and spending habits, and 59 percent rate their grandparents as very good to excellent savers. With 97 percent of young adults concerned about saving for their future, grandparents can make a difference by sharing how their financial decisions – for better or worse – have affected their lives. In fact, the study shows that the No. 1 topic grandchildren would like to talk about with their grandparents is their memories and past experiences, which presents a great opportunity for grandparents to discuss their financial choices within the context of their personal stories.

“Young adults are surprisingly open to talking with their grandparents about money, regardless of the generation gap,” said Joseph Coughlin, Ph.D., director of the Massachusetts Institute of Technology AgeLab, who collaborated with TIAA-CREF on the study. “When it comes to saving for college, most young adults feel unprepared, and grandparents aren’t fully aware of how they can help. Conversations about money over time could help young adults more than their grandparents realize.”

Coughlin suggests starting these conversations early in childhood. “When you empower children to understand financial decisions, they develop a lifelong sense of confidence and trust in themselves, helping them become successful adults,” added Coughlin.

Young Adults Feel Financially Unprepared for College

With the cost of a four-year degree skyrocketing, young adults are very concerned about saving for higher education. Thirty percent indicate they have nothing saved for college. Of those surveyed, only 29 percent report that their grandparents have helped or are helping with their educational expenses.

Half of Grandparents Underestimate Cost of College; One Quarter Help Foot the Bill

Grandparents are largely unaware of the rising costs of a four-year degree. Twenty percent think a four-year education costs $30,000 to $50,000 and 26 percent think it costs $50,000 to $75,000, when in fact a moderate, in-state public four-year college education costs approximately $100,000. A moderate private four-year college education now averages around $164,000.*

While 66 percent of grandparents surveyed say they don’t feel responsible for helping finance their grandchildren’s higher education, 23 percent help pay for college. In a supplemental qualitative study, grandparents shared that their willingness to help depends on the habits and maturity of their grandchildren.

“In our focus groups, we found grandparents are willing to help their grandchildren financially, but they want some assurance that their grandchildren have ‘skin in the game,’” said Coughlin. “Grandparents need to know their grandchildren are serious about achieving future success through advanced education by using their own money to help pay for at least part of it.”

New Tools Available to Foster Money Conversations

To help grandparents and grandchildren ease into conversations about money and saving, TIAA-CREF recently introduced a variety of tools and resources to help break the ice, including conversation tips and worksheets, templates for electronic incentives and reward certificates, as well as a dedicated website with informational resources. These tools were designed as part of AARP® College Savings Solutions from TIAA-CREF, a program that provides parents and grandparents with education, information and tips on saving for college.

Grandparents Are Unaware of Affordable Ways to Help

Grandparents surveyed also are unaware of affordable ways they can impact their grandchildren’s financial future. Specifically, 67 percent of grandparents say they haven’t heard of 529 savings plans.

“In addition to grandparents sharing their own financial experiences, 529 college savings plans are an easy and affordable way for grandparents to help their grandchildren save for college,” said Doug Chittenden, executive vice president, Individual Business, TIAA-CREF. “Grandparents may lack awareness of 529s because they didn’t have to think about starting a college fund with their own kids.”

A 529 college savings plan is an investment account that allows any earnings on contributions to grow tax-deferred. Withdrawals, if used to pay for qualified higher education expenses, are federal income tax-free. Some states offer additional tax benefits, such as an income tax deduction or tax credit for state residents on plan contributions.
To learn more about the benefits of 529 college savings plans and for tools to help grandparents initiate conversations with their grandchildren about money and saving for college, visit

TIAA-CREF Survey Methodology

The nationwide dual-approach survey was fielded online among 1,000 grandparents age 50 and older with at least one grandchild age 18 to 24. The survey was fielded by KRC Research on behalf of TIAA-CREF from April 23 to 28, 2014. Data was weighted by key demographic variables to ensure the sample reflects the national population distribution. A second nationwide survey was fielded online by KRC Research among 1,003 adults age 18 to 24 from April 23 to 29, 2014.

Respondents for this survey were selected from among those who have volunteered to participate in online surveys and polls. Because the sample is based on those who initially self-selected for participation, no estimates of sampling error can be calculated. All sample surveys and polls may be subject to multiple sources of error, including, but not limited to sampling error, coverage error, error associated with non-response, error associated with question wording and response options.

TIAA-CREF Focus Group Methodology

On behalf of TIAA-CREF, KRC Research conducted four focus groups among grandparents with a grandchild between the ages of 17 to 24. To qualify for the groups, grandparents had to have a minimum annual income of $50,000 and minimum investible assets of $100,000 or more. Two groups were conducted in Grand Rapids, Mich., March 18, and two groups were conducted in San Diego, Calif., March 20. Each group participated in a two-hour, open-ended discussion facilitated by a professional moderator. A total of 39 people (20 in Grand Rapids and 19 in San Diego) participated in the groups. The 21 women and 18 men ranged in age from 58 to 81, with a median age of 68.


TIAA-CREF ( is a national financial services organization with $613 billion combined assets under management (as of 6/30/2014) and is the leading provider of retirement services in the academic, research, medical and cultural fields.

About AARP

AARP is a nonprofit, nonpartisan organization, with a membership of nearly 38 million, that helps people turn their goals and dreams into real possibilities, strengthens communities and fights for the issues that matter most to families, such as healthcare, employment and income security, retirement planning, affordable utilities and protection from financial abuse. We advocate for individuals in the marketplace by selecting products and services of high quality and value to carry the AARP name, as well as help our members obtain discounts on a wide range of products, travel and services. A trusted source for lifestyle tips, news and educational information, AARP produces AARP The Magazine, the world's largest circulation magazine; AARP Bulletin;; AARP TV & Radio; AARP Books; and AARP en Español, a Spanish-language website addressing the interests and needs of Hispanics. AARP does not endorse candidates for public office or make contributions to political campaigns or candidates. The AARP Foundation is an affiliated charity that provides security, protection and empowerment to older persons in need with support from thousands of volunteers, donors and sponsors. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. AARP College Savings Solutions from TIAA-CREF is provided by TIAA-CREF, not AARP or its affiliates.  TIAA-CREF pays a royalty fee to AARP for the use of its intellectual property. These fees are used for the general purposes of AARP.   AARP does not employ or endorse TIAA-CREF associates. Please contact TIAA-CREF directly for details.

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* From CollegeBoard Trends in College Pricing report for 2013-2014 academic year

© 2014 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA-CREF), 730 Third Avenue, New York, NY 10017