September 12, which just passed, is National Grandparents Day. In addition to the love and emotional support that grandparents provide, many also offer financial support. And, in some cases, grandparents are actually raising their grandchildren. There is food for thought for all family members when it comes to the financial assistance that grandparents provide and the financial help that some grandparents might need.
A 2019 article from AARP said that a survey the organization conducted found that despite the fact that close to 94% of grandparents give money to help grandchildren, “Today’s grandparents do not consider themselves financial supporters of their grandchildren…” AARP found that average grandparents in the U.S. at that time spent $2562 each year on grandchildren. In total, AARP calculated grandparent spending to be around $179 billion annually. That is a huge amount of money that makes a difference in the lives of their grandchildren.
Grandparent pending can vary. Some grandparents are buying gifts, paying tuition, and spending money to visit their grandchildren. Others may be providing basic necessities or actually acting as primary caregivers. MoneyGeek offers information on “Support for Grandparents Raising Grandchildren“.
Even those that are not primary caregivers may still give of their time by offering before and after school care and date night babysitting. There is likely no way to calculate how much parents save when grandparents spend time caring for grandchildren but given the ever-increasing cost of childcare, the figure is probably quite large.
Just like parents, grandparents should think carefully about going into debt or raiding their retirement funds to offer financial assistance.
Another way that grandparents offer financial assistance is via estate planning. Grandparents may leave money, real estate, IRA funds, businesses, and stock to any of their heirs, including grandchildren. A Fee-Only financial planner can’t help with babysitting, but you can consult with one assist about estate planning.