Parents and Grandparents College Savings Survey

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TABLE OF CONTENTS

RESEARCH METHOD…………………………………….... . KEY FINDINGS………………………………………………… SURVEY RESULTS…………………………………………… APPENDIX……………………………………………………...

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4

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This survey was conducted by Head Solutions Group on behalf of TD Ameritrade Holding Corporation.1

The statistical margin of error for the total sample of N=2,018 American adults within the target group is +/- 2.1 %.2 This means that in 19 out of 20 cases, survey results will differ by no more than 2.1 percentage points in either direction from what would have been obtained by the opinions of all target group members in the U.S. Sample was drawn from major regions in proportion to the U.S. Census. 1 Head Solutions Group (U.S.) Inc. and TD Ameritrade Holding Corporation are separate, unaffiliated companies and are not responsible for each other’s products and services. 2 Assumes survey participants are the same as non participants. Note: Percentages may not add up to 100 due to rounding.

New England

5%

Mid-Atlantic

16%

South

26%

Southwest

11%

West

20%

2,018 American adults (half Millennial Parents, half Grandparents with

Millennial Children)

Online Survey

October 20-26,

2016

Average time to complete survey:

18 minutes

Head Solutions Group on behalf of TD

Ameritrade Holding Corporation1

49% Male

51% Female

Midwest

22%

WHEN WHAT WHO

CONDUCTED BY

Research Method

Throughout this report, arrows indicate a significant difference between Millennial Parents and Grandparents.

Callouts show significant differences between subgroups noted (i.e. Males and Females, or between Ethnicities) within Millennial Parents (shown in green callouts) or within Grandparents (in yellow), or between a subgroup and the total sample of Millennial Parents or Grandparents.

Key Findings

• Millennial parents prioritize education for children and emergency savings over retirement savings as their top savings priorities. As expected, grandparents put their retirement savings first.

• Millennial parents have $9,180 in student debt, on average, and $11,995 in other debt such as credit card balances, lines of credit and personal loans.

• Two-thirds (64%) of millennial parents who have student debt believe it is likely that the debt will be paid off before their own children reach college age.

• Nine in 10 millennial parents plan to pay at least some of their child’s college fees.

• Millennial parents who expect their child to go to college are prepared to eat out less (50%), spend less money on themselves (50%) or live a simpler lifestyle (49%) to save money for their child’s college fees.

• Six in 10 (60%) grandparents have paid at least some of their children’s college fees.

• Six in 10 millennial parents say they are “happy to help” pay the college fees of their children.

• Six in 10 millennial parents who do not expect to pay in full for their child’s college believe that their child should take responsibility for some/all fees.

• During teenage years, 6 in 10 (61%) millennial parents held a part-time job in the summer compared to half (52%) of grandparents who did the same.

• Six in 10 (63%) grandparents believe they prepared their children for the “real world” very well.

• Millennials and grandparents alike were most likely to be taught about the real world through learning basic household skills (59% and 71% respectively).

Millennial parents prioritize education for children and emergency savings over retirement savings as their #1 savings priorities. As expected, grandparents put their

retirement savings first

Q200b. Base: All Millennial Parents n=1,004; All Grandparents n=1,014 Arrows indicate a significant difference between Millennial Parents and Grandparents at 95% confidence

Which of the following is your #1 savings priority?

19

19

15

13

5

4

4

4

14

36

3

9

7

4

3

0 10 20 30 40

Education for my children

Emergency fund

Retirement

A down-payment on a home

Health or medical emergency

Home improvements

A car/motor vehicle

Gifts/holiday purchases

Millennial Parents Grandparents

3

2

1

1

2

7

4

0

0

1

4

0

1

14

0 10 20 30 40

A vacation

Education for myself

My wedding/civil ceremony

Wedding/civil ceremony of my children

Education for my grandchildren

Wedding/civil ceremony of mygrandchildren

Some other specific purchase

Nothing in particular

n/a

n/a

n/a

%, in order of Millennial Parents %

Millennial parents who are saving for their children’s education are saving, on average, $310 per month, while grandparents are saving a monthly average of $205 toward their

grandchildren’s education

Q205. Base: All saving for education for children: Millennial Parents, n=563, All saving for education for grandchildren: Grandparents n=206.

In a typical month, how much money, if any, do you save towards the following?

Average (nearest $5)

Millennial Parents Grandparents

$310

$205

0

50

100

150

200

250

300

350

Monthly Savings

Education for my children Education for my grandchildren

Millennial parents have $9,180 in student debt, on average, and $11,995 in other debt such as credit card balances, lines of credit and personal loans

Q220. Base: All Millennial Parents n=1,004; All Grandparents n=1,014 1. Trimmed Average, excluding top and bottom 5% to reduce impact of outliers

How much debt do you and your spouse/partner (if applicable) currently have if at all?

Millennial Parents Grandparents

51

21 13 7 5 2

85

6 4 2 2 1 0

20

40

60

80

100

$0 $1 to $10,000 $10,001 to $30,000 $30,001 to $50,000 $50,001 to $100,000 Over $100,000

31

11 9 7

11 11 11 9

32

7 9 7

10 13 13

9

0

5

10

15

20

25

30

35

$0 $1 to $1,000 $1,001 to $3,000 $3,001 to $5,000 $5,001 to $10,000 $10,001 to $20,000 $20,001 to $50,000 Over $50,000

Student Debt

Other debt (excluding Student Debt and mortgages)

Average1: $9,180 Average1: $1,215

Average1: $11,995 Average1: $12,820

• Grandparents still hold $1,215 in student debt, and a further $12,820 in other debt (excluding student loans and mortgages)

%

How likely is it that the student debt held by you and/or your spouse/partner (if applicable) will be fully paid off before your children are of an age when they may start college?

Two-thirds (64%) of millennial parents who have student debt believe it is likely that the debt will be paid off before their own children reach college age

Q240. Base: All Millennial Parents with student debt n=272

Millennial Parents %

46

18

14

10

9 2 Very likely

Quite likely, as long as I do not experience anyunforeseen financial setbacks

Equally likely as unlikely

Quite unlikely

Very unlikely

I don't know

• However, we know that grandparents still carry $1,215 in student debt

64% say it is likely the debt will be paid off

Paying for Children’s College

Nine in 10 millennial parents plan to pay at least some of their child’s college fees

Q700. Base: All Millennial Parents n=1,004

28

34

29

7 2

All of the fees

Half of the fees or more, but notall

Some of the fees, but less thanhalf of the fees

None of the fees

I don't expect my child/childrenwill go to college

91% plan to pay at least some of their children’s college fees

• Millennial parents with only one child are more likely than those with more children to plan to pay all the fees (1 child: 34%, 2: 25%, 3 or more: 21%)

• Latino/Hispanic and Asian millennial parents are twice as likely than caucasian millennial parents to expect to pay all the fees (43%, 42%, 23%, respectively)

1 child: 34% 2 children: 25%

3 or more children: 21%

Latino/Hispanic: 43% Asian: 42%

Caucasian: 23%

How much of your child’s college fees do you and your spouse/partner (if applicable) expect to pay?

% Millennial Parents

H Income. $100k+: 35%

Six in 10 millennial parents who do not expect to pay in full for their child’s college believe that their child should take responsibility for some/all fees

Q705. Base: All Millennial Parents not paying for all of their child’s college fees n=702

4

5

6

15

26

39

60

Other reasons

My child will get scholarships/grants/aid

My parents are planning to pay for my child's college fees

We are saving for our own retirement

I/we paid for my/our own college so think my/our child should too

I/we cannot afford to do so

I/we believe my child should take responsibility for all/some of his/her college fees

0 10 20 30 40 50 60 70

• Millennial parents with a household income of $100,000 or more are more likely than millennial parents as a whole to believe their child should take some responsibility for college fees (71% vs. 60%, on average)

H Income $100k+:71%

H Income <$75k:49%

Why are you and your spouse/partner unlikely to pay for all/ part of your children’s college fees?

% Millennial Parents

Six in 10 millennial parents say they are “happy to help” pay the college fees of their children

Q710. Base: All Millennials Parents who expect their child/children to go to college (n=984). Multiple responses allowed * Small base n=76

How do you feel regarding the extent to which you expect to pay the college fees of your children?

58

40

26

9 7 7 3

10

Happy to help Relieved Guilty Sad Angry None of the above

• Four in 10 (40%) millennial parents, including 6 in 10 (58%) African American millennial parents, are proud to pay their child’s fees • One-quarter (26%), including 4 in 10 African-American (44%) and Latino or Hispanic (39%) millennial parents feel “obligated” to

pay their child’s fees

Millennial Parents

%

%, ‘Proud’

Caucasian Asian African-American Latino or Hispanic

%, ‘Obligated’

39%

39%

58%

36%

24%

22%

45%

39%

Proud Obligated

Six in 10 (57%) millennial parents do not expect their parents to help with the college fees of their child

Q712. Base: All Millennial Parents with a living parent n=885

22

57

21

Yes

No

I don't know

Latino/Hispanic: 31%

• Three in 10 (31%) Latino/Hispanic millennial parents expect that their own parents will help with their child’s college fees, compared to 2 in 10 (22%) millennial parents overall

Do you expect that your parents will help with the college fees of your child/children?

% Millennial Parents

Millennial parents who expect their child to go to college are prepared to eat out less (50%), spend less money on themselves (50%) or live a simpler lifestyle (49%) to save

money for their child’s college fees

Q720. Base: All Millennial Parents who expect their child will go to college n=885. Multiple responses allowed

50

50

49

39

37

33

29

26

20

18

16

16

6

8

0 10 20 30 40 50 60

Eating out less/cutting back on entertainment

Spending less money on myself

Living a simpler lifestyle

Buying a used car/Keeping a car for longer

Having fewer vacations/travelling less

Finding a better paid job

Retiring later than desired

Working full or part time instead of being a stay-at-home parent

Having a smaller family home

Having fewer children than I would ideally like

Saving less for my retirement

Spending less money on my children

Providing less financial support to aging parents

None of the above

Millennial Parents

Stay-at-home: 38%

Stay-at-home: 62%

• Four in ten (38%) stay-at-home parents would be willing to sacrifice staying at home, and work instead, in order to save money for college fees

What would you sacrifice in order to save money for your child’s college fees?

%

Six in 10 (60%) grandparents have paid at least some of their children’s college fees

Q730. Base: All Grandparents n=1,014

22

16

22

21

19

All of the fees

Half of the fees or more, butnot all

Some of the fees, but lessthan half of the fees

None of the fees

My adult child did not go tocollege

60% paid at least some of their children’s college fees

• Four in 10 (41%) grandparents with a high household income ($100,000 or more) paid all of their child’s college fees, where as only 1 in 10 (9%) of those with a household income of $50,000 or less paid the same proportion

Female: 18% Male: 26%

H Income <$50k: 9% H Income $100k+: 41%

How much of your child’s college fees did you and your spouse/partner (if applicable) pay?

% Grandparents

Half (50%) of grandparents who did not pay all of their child’s college fees believed in their child taking responsibility for paying fees

Q735. Base: All Grandparents who did not pay all of their child’s college fees among those whose adult child went to college n=604

6

2

3

10

12

36

50

0 10 20 30 40 50 60

Other reasons

My/my spouse/partner's parents paid for my child's college fees

My child paid their own way

I/we paid for my/our own college so thought that my/our child should too

My child got scholarships/aid/grants

I/we could not afford to do so

I/we believed my child should take responsibility for all/some of his/her college fees

• Slightly more than a third (36%) of grandparents could not afford to pay all/part of their children’s college fees

H Income <$50k: 50% H Income $100k+: 25%

Why did you and your spouse/partner not pay for all/part of your children’s college fees?

% Grandparents

Part-time Jobs as Teens

During teenage years, 6 in 10 (61%) millennial parents held a part-time job in the summer compared to half (52%) of grandparents who did the same

Q815. Base: All Millennial Parents n=1,004, Grandparents n=1,014

61 51

16

Yes, a part-time jobin the summer

Yes, a part-time jobthroughout the

school year

No

52 54

14

Yes, a part-time jobin the summer

Yes, a part-time jobthroughout the

school year

No

Yes, a part-time job in the summer Yes, a part-time job throughout the school year No

Millennial Parents

• Half (51%) of millennial parents and half (54%) of grandparents held a part-time job throughout the school year • For Grandparents, males were more likely than females to have held part-time jobs, whereas for millennial parents there is no

difference between the genders in likelihood to have held a part-time job

Female: 18%; Male: 8%

Female: 49%; Male: 59% Female: 48%; Male: 56%

Did you have a part-time job when you were a teenager?

%

Grandparents

Four in 5 grandparents (83%) had children who had part-time jobs when teenagers, either in the summer or throughout the school year

Q817. Base: All Grandparents n=1,014

52 45

17

Yes, a part-time job in thesummer

Yes, a part-time jobthroughout the school year

No

83%

Did your adult child have a part-time job when they were a teenager?

% Grandparents

Preparing for the ‘Real World’

1

1

1 2

1

3

2

6

7

9

15

17

20

28

28

16

13

18

14

Not very well at all

Very well

Six in 10 (63%) grandparents believe they prepared their children for the “real world” very well

Grandparents

• Millennial parents are not as confident – fewer (55%) say they have prepared their children for the real world well

Q800. Base: All Millennial Parents n=1,004; All Grandparents n=1,014

6 7 8 9 10 1-3

6 7 8 9 10 1-4

Millennial Parents

8 to 10: 55% 1 to 3: 2%

8 to 10: 63% 1 to 3: 4%

H Income $150k+: 44%

How well do you think you are preparing, did prepare or will prepare your children for the “real” world?

%

4 5

5

Millennials are most likely to teach/have taught their children about the real world by imparting basic financial skills (73%)

Q810. Base: All Millennial Parents n=1,004; All Grandparents n=1,014. Multiple responses allowed Arrows indicate a significant difference between Millennial Parents and Grandparents at 95% confidence

In which of the following ways have you, or do you expect to, prepare your children for the “real world”?

73

72

70

67

53

51

44

5

74

78

66

71

60

57

33

3

0 10 20 30 40 50 60 70 80 90

Teaching them basic financial skills

Teaching them basic household skills (e.g. cooking, laundry, grocery shopping),

Teaching them how to manage their allowance/finances when young

Making them save for/pay for some of their own needs/wants

Encouraging them to take a part time job,

Encouraging them to learn a trade or other skill

Encouraging them to take an internship/work study

None of the above

Millennial Parents Grandparents

• Grandparents place greater emphasis on teaching basic household skills than millennial parents do (grandparents: 78%; millennial parents: 72%)

H Income <$50k: 80%

H Income $150k+: 32%

Female: 64%; Male: 56%

Female: 82%; Male: 74%

Female: 61%; Male: 52%

%

4

3

3

2

4

3

5

5

7

8

10

16

14

17

20

21

14

12

19

14

Not very well at all

Very well

Half (53%) of grandparents and 4 in 10 (46%) millennial parents say they were well prepared for the real world by their own parents

Grandparents

Q820. Base: All Millennial Parents n=1,004; Grandparents n=1,014

5 6 8 9 10

6 7 8 9 10

Millennial Parents

8 to 10: 46% 1 to 3: 9%

8 to 10: 53% 1 to 3: 11%

7

How well do you think your parents/guardians prepared you for the “real” world when you were a child?

%

4 3 2 1

5 4 3 2 1

Millennials and grandparents alike were most likely to be taught about the real world through learning basic household skills (59% and 71% respectively)

Q830. Base: All Millennial Parents n=1,004; All Grandparents n=1,014. Multiple responses allowed Arrows indicate a significant difference between Millennial Parents and Grandparents at 95% confidence

In which of the following ways did your parents/guardians prepare you for the “real world”?

59

54

54

48

43

29

25

9

71

58

63

50

46

41

16

8

0 10 20 30 40 50 60 70 80

I was taught basic household skills (e.g. cooking, laundry, grocery shopping)

I was encouraged to take a part time job,

I was made to save for/pay for some of my own needs/wants

I was taught basic financial skills

I was taught how to manage my allowance/finances when young

I was encouraged to learn a trade or other skill

I was encouraged to take an internship/work study

None of the above

Millennial Parents Grandparents

• Being encouraged to take a part time job (54%, 58%) and having to save/pay for some of their own needs/wants (54%, 63%) were other popular methods of being taught about the real world

• Females are more likely to have been taught basic household skills in both generations (Grandparents: 77 vs. 64%, Millennial Parents: 66% vs. 53%)

Female: 66% Male:53%

Female: 25% Male:33%

Female: 77% Male:64%

Female: 38% Male:45%

Female: 54% Male:63%

Female: 60% Male:67%

%

Appendix

Survey sample characteristics

Base: All Millennial Parents, n=1,004; Grandparents n=1,014

5

15

25 23

11

21

5

16

27 22

11 18

New England Mid-Atlantic South Midwest Southwest West

Region

19 12

36 32

0

26 22 28 22 1

High schoolor less

Technicaldegree

Undergraduate collegedegree

Graduate/Professionaldegree

Prefer not to answer

Education

28 23 17 29 2

28 21 18 29 5

Less than $50k $50k-$74.9k $75k -$99.9k $100k + Don't know/ Prefernot to answer

Household Income

Marital Status

14

81

5 0 2

76

16 6

Single, nevermarried

Married/ Commonlaw

Separated/Divorced

Widowed

50 50 47 53

Male Female

Gender

% Millennial Parents Grandparents

70

12 10 8 4 1

88

3 4 6 4 0

Caucasian Asian Latino or Hispanic African-American Others Prefer not to say

Ethnicity

5 19

42 34

16 31 31

22

19 to 24 25 to 29 30 to 34 35 to 37 50 to 54 55 to 59 60 to 64 65 to 70

Age