Easing the Pain

Grandparents are more involved with their grandchildren financially and socially than in previous generations, says Betsy Treitler, VP of marketing communications for AIG. “They are very much involved in funding their grandchildren’s education in a number of different ways,” she says, especially since this group is mostly retired and probably “wasn’t as affected” by the bear market and unemployment as their children. Despite their good intentions, however, most grandparents are not familiar with 529 plans and therefore are not using the most effective savings strategies, she continues. According to the survey, 89% of grandparents aren’t invested in 529 plans, and 9% were not even aware of 529 plans.

On a positive note, the survey did reveal that grandparents understand the value of getting startd early on a college savings plan, with 70% of respondents suggesting such plans should be started before the child reaches age four.