Intergenerational gift-giving has grown substantially in the past decade or so. One analysis of Census Bureau data found that between 1999 and 2009, the amount that Americans over 55 gave to their adult children increased by more than 70 percent. During that period, the amount given specifically for primary- and secondary-school tuition and school supplies—that is, to be spent on the grandkids—nearly tripled.
Read more: The age of grandparents is made of many tragedies
Financially, my husband and I are lucky; we’ve been careful with our spending, yes, but more than that, we’ve had relatively well-paying, stable careers. Most Americans our age aren’t so lucky: Just 39 percent of working adults in the United States have managed to save enough to get themselves through five years of retirement, let alone give a leg up to their progeny.
But even without adequate savings, parents and grandparents these days are quick to offer monetary help to younger generations—sometimes raiding the nest egg they might need for themselves. “Financial managers advise the elderly to hold on to the money they’ve saved, to use it to care for themselves in old age, to avoid becoming the responsibility of their children,” Kathleen Gerson, a sociology professor at New York University, told me. But many grandparents have a hard time listening to this advice, she said, because they can see that their children and grandchildren are even more financially insecure than they are. Giving money serves two functions, Gerson said—it’s “a way of expressing love,” and a way to help ensure “that your children’s children will have a decent spot in the world.”
But no matter how well intentioned these transactions are, the fact that many young Americans turn to the Bank of Grandma and Grandpa is evidence of their struggles and the lack of an adequate safety net to keep them afloat. Giving money to grandchildren is also one way that well-off families pass on privilege and wealth not just to the next generation, but to the one after that—a way that Americans stay rooted in the social stratum into which they were born.
Gerson pointed out that robust social programs benefiting grandparents might be what make them feel able to offer support in the first place. In the 20th century, poverty among the elderly was “greatly erased,” she told me, “thanks to policies such as Social Security.” According to the Center on Budget and Policy Priorities, a left-leaning think tank, 9 percent of Americans older than 65 have an income below the poverty line—but if Social Security didn’t exist, that number would balloon to 39 percent.
Yet while poverty among the elderly has plummeted, childhood poverty has held steady—as programs like food stamps and Aid to Families With Dependent Children have been overhauled and the cost of college has skyrocketed. According to the National Center for Children in Poverty, children younger than 18 are more than twice as likely to be poor as adults older than 65. That stark difference in their fortunes makes it hard for grandparents to turn away from the youngest generation, whose needs are so obvious. As Gerson put it, grandparents are “stepping into the void” created by the loss of social safety nets.