Orlando, Fla. (Ivanhoe Newswire) — Grandparents love spoiling their grandkids, but more and more families are relying on grammy and gramps for financial help. Surveys show nearly half of grandparents say they help pay for things like school expenses, activities, and childcare but that generosity can come at a cost, because research shows nearly 40 percent of households approaching retirement have no retirement savings at all. Many grandparents say they feel pressure to give, even when it stretches their own budget.
Grandparents are the best! They give the best kisses, best hugs, best gifts!
But the costs can add up quickly. On average, grandparents spend around four thousand dollars a year on their grandkids.
“Grandparents want to see their grandchildren smile and laugh and they want to be loved,” said Beth Davalos, LCSW, Sunshine Senior Counseling.
And with costs of just about everything going up, grandparents are being asked to step up, especially when it comes to childcare. The average cost for two young children in daycare is now approaching 30 thousand dollars a year. So now, about four in 10 grandparents provide regular, even daily, childcare.
And while many say they love the time together, it can also come with real costs. From gas and food to lost income or retirement savings. So, some are now asking, should grandparents get paid for their time?
Surveys show more than one in 10 grandparents have taken money from savings or retirement accounts to help their grandchildren.
“Grandparents don’t necessarily go broke because they didn’t save. Grandparents can go broke because they love and they care too much,” explained Davalos.
Financial advisors say grandparents don’t have to stop helping, but they should set clear boundaries, starting with creating a grandkid budget.
“It’s setting a gentle kind boundary that they can only afford so much.,” said Davalos.
Instead of money, give experiences and your time, help with education savings, not daily expenses, and never take money from retirement accounts. Because when grandparents protect their own finances, they’re also protecting their family’s future.
Financial planners also warn that grandparents should be careful about co-signing loans or credit cards for family members. If payments are missed, grandparents will be legally responsible for the debt, which can damage their credit and put their retirement savings at risk. Interestingly, in Sweden, under a new law, grandparents are eligible for up to three months of government paid parental leave for a grandchild’s first year.
Contributors to this news report include: Marsha Lewis, Producer; Bob Walko, Editor.
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Sources:
https://www.moneytalksnews.com/grandparent-spending/
https://www.aarp.org/money/personal-finance/ways-grandparents-overspend-on-grandkids/
https://www.huffpost.com/entry/paying-grandparents-babysit-grandchild_l_66e86e8ce4b06998fbec7523
