Grandparents are increasingly involved in taking care of their grandchildren. Not only do grandparents provide gifts on special days or assist with babysitting duties, but many are parenting children on their own. Even when grandparents do not seek to become the legal guardians of their grandchildren, they might want visitation rights.
Grandparents should absolutely seek to spend as much time with grandchildren as they can, but it is important not to lose sight of retirement in the process. Grandparents who must become legal guardians due to death, disability or substance abuse might have no choice in the matter. However, it is still worth understanding what may lie ahead.
The spending power of grandparents
According to AARP, almost 94% of grandparents provide financial support of some kind to their grandchildren. As America’s population ages, there are more grandparents spending money on children than there has been in a long time. On average, each year, grandparents spend $2,562 on their children. These are the most common expenses grandparents contribute to:
- Vacation trips
- Tuition for school
- Daily expenses
- Major expenses, such as medical bills
The financial strain
Some grandparents have more than enough to share with their grandchildren, but most Americans are not nearly as ready for retirement as they should be. Consequently, grandparenting can lead to financial strains.
Forbes points out that most Americans become grandparents during their working years. In fact, by 65 years old, 96% of Americans have entered grandparenthood. However, in retirement, grandparents have fewer dollars to spend and might want to consider scaling back each year.
For grandparents who intend to seek partial, temporary or primary custody of grandchildren, it is important to keep retirement plans in mind. The grandparents’ future and the financial stability of the children depend on their ability to put as many financial safeguards in place as possible before pursuing this goal.