CPA Caregiver-Your Money Matters & Grandparents Matter
New Insights for a New Generation of Grandparents
by Peter Francese
Today, the Norman Rockwell image persists of grandparents as aged, whitehaired
grandmothers and grandfathers — the ones for whom National Grandparents Day
was inaugurated in 1978. The reality is quite something else.
Back in 1980, when that image was closer to reality, there were fewer than 40
million mostly quite elderly grandparents in a young nation where half of the
population was under 30 years old.
Based on data from the U.S. Census Bureau and the Bureau of Labor Statistics,
by 2010, we estimate that there were some 65 million grandparents in the
nation where almost half the population was over 40, and more than one in
every four adults was a grandparent. Rather than being old and frail, a majority
of grandparents today are working age Baby Boomers between 45 and 64 years
old. Three-quarters of the people in that age range are in the workforce and
most of them work full-time.
A long way from being dependent, households that are headed by someone
45 to 64 years old command almost half (46%) of the nation’s total household
income. If households older than age 65 are added in, the grandparent age
share of the nation’s income rises to 60%, which is a full 10 percentage points
higher than it was in 1980.
What is new is the presence and deep involvement of an
extraordinarily large number of savvy American grandparents.
During the same decade that grandparents have made significant financial
gains, many of their adult children have been falling farther behind. The decade
from 2000 to 2010 was one in which grandparent households did far better
financially than the households headed by their offspring, who saw their real
income either stagnate or actually decline.
Over the decade we are now entering, the U.S. and global labor market for
entry-level workers is expected to be increasingly competitive, thus calling into
question any real future wage growth. Even when the presently high
unemployment rates for younger workers gets back to some post-recession
normal, good-paying jobs with benefits are expected to be harder to find.
This situation has given rise to a widely held belief that the next generation,
namely Generation Y or Millennials, will not do as well financially as their Baby
Boomer parents. Given the enormous impact of the Great Recession on young
workers, it’s easy to see how this idea would gain traction. But it’s antithetical
to the fundamental and core American belief in continuing generational
The increasing financial involvement of today’s record number of grandparents
in the lives of their adult children and grandchildren suggests that large numbers
of grandparents are making substantial commitments of their time and personal
resources to insure that this core value is maintained and their next generation
will in fact do better.
What this means is that future financial service providers will find that more of
their major transactions, whether they be loans, mortgages, or insurance, may
involve multiple generations. The grandparents may be only there to give advice
or they may be a party to the contract. But they are far more likely to be
engaged than at any time in the past.
The implications for American employers are threefold. First, most of today’s
younger workers know their uncertain financial situation all to well and may be
more interested in advice on managing their personal finances than at any time
in the past. But many of them will also be getting some of that advice from
parents and grandparents.
Second, more older employees and probably more senior managers, are likely to
be grandparents. Their attitudes toward employee benefits may tilt toward those
that help young families cope with the rising cost of education and childcare.
They may also want to change the definition of dependant-eligible benefits to
Third, as millions of active Baby Boomers turn 65 years old each year, more older
employees in the future will potentially have Medicare as their primary health
insurance. They may want some other insurance-related employee benefit
instead that would cover one or more of their grandchildren who is not covered
by any policy.
The bottom line is this: considering the rising income of many grandparent-age
households occurring at the same time the income of their adult children shown
in Figure 6 is declining, no one should be surprised that grandparents have been
sharing their unprecedented good fortune with their grandchildren.
But what about the future? No one can say for sure that the decade from 2010
to 2020 will see a repeat of the above described scenario. However, there is
mounting evidence that a larger percentage of the better-educated Baby
Boomers, the oldest of which is just 65, are likely to work longer after that age
than their predecessors. That will obviously contribute more to their household
incomes than if they retired earlier.
The trends described in this report suggest strongly that for at least the next
decade, and probably well beyond that, American grandparents will be playing
a central role in the lives of their grandchildren as well as their adult children.
Taken together, the trends discussed above all mean that for the foreseeable
future grandparents will be needed as much as ever by their grandchildren.
The full report is available at: