Financial Capability: A Quantitative Approach Examining Intergenerational Wealth Transfer and Financial Socialization Among Age Groups.

Background

Financial capability is shaped not only by individual knowledge and behavior, but also by family processes that transmit economic advantage across generations. Within families, these processes occur through both material transfers, such as gifts, inheritance, and support for major expenses, and nonmaterial transfers, such as parental teaching, modeling, and financial guidance. Although both pathways have been widely studied, they are often examined separately, which limits understanding of how they jointly influence financial capability across adulthood. In this study intergenerational wealth transfer and financial socialization are examined through racial and socioeconomic class, to gain an understanding how financial socialization operates across the broader adult life course or how it interacts with material family resources.

Methods

This study utilized data from the 2021 and 2024 waves of the National Financial Capability Study (NFCS), a nationally representative survey of U.S. adults aged 18 and older. The NFCS provides comprehensive measures of financial behaviors, financial knowledge, financial access, and economic experiences across the U.S. population.

The analytic sample was constructed by pooling respondents from the 2021 and 2024 datasets. These waves were selected because they include direct measures of intergenerational financial transfers, including parental or grandparental financial support, large financial gifts, and inheritance expectations. Respondents with missing data on key variables were excluded using listwise deletion for regression analyses.

Results

Descriptive analyses indicated that approximately 42–48% of respondents reported receiving some form of intergenerational financial transfer across the 2021 and 2024 survey waves. Bivariate comparisons revealed clear differences in financial outcomes by transfer status. Individuals who reported receiving intergenerational transfers were substantially more likely to have a savings account (47.10%) compared to those who did not (29.44%), and were more likely to report having emergency savings (51.31% vs. 33.71%). Multivariate logistic regression analyses further confirmed these patterns.

Intergenerational financial transfer was positively associated with having a savings account (β = 0.40, p < .001), having a checking account (β = 0.18, p < .001), and having emergency savings (β = 0.46, p < .001), controlling for demographic characteristics. Similarly, transfer receipt was associated with a higher likelihood of being able to cover a $2,000 emergency expense (β = 0.46, p < .001). Linear regression results indicated a smaller but statistically significant association between transfer receipt and subjective financial knowledge (β = 0.10, p < .001).

Interaction analyses between intergenerational transfer and generational cohort were largely non-significant, suggesting that the relationship between transfer receipt and financial outcomes operates consistently across age groups.

Discussion

Despite, acquiring data from the 2021 and 2024 National Financial Capability Study (NFCS) there remains inexplicable information on intergenerational wealth transfer among certain age groups. The current intergenerational health transfer study shows compelling findings; however, there remains an inadequate understanding on the correlation of intergenerational health transfer and financial capability linkage among younger and older age groups. In the social work profession, it is important to deliver educational research on financial capability to marginalized communities that experience economic inequality among the targeted population.