Grandparents make up a large portion of the American population, and this in turn has a significant impact on the economy as consumer spending among the 55-plus demographic (many of whom are grandparents) is higher than any other age group, says a recent MetLife report.
The ranks of grandparents are expanding at twice the overall growth rate, and by 2020, nearly one out of every three adults is projected to be a grandparent, for an estimated 80 million.
Many grandparents have seen a significant increase in their inflation-adjusted household incomes, quite a different situation from their struggling children, says MetLife. These older households have experienced a $659 billion increase in the past 10 years, up 6%. In contrast, during this same time period, household income for adults aged 25-44 fell 7% for an aggregate income loss of $312 billion.
Compared to one decade ago, grandparents are spending significantly more on their grandkids, including buying infant food, equipment, clothing, and toys. Additionally, they’ve spend $2.43 billion on primary and secondary school tuition and supplies, which is nearly three times more than 10 years ago. This is probably because Boomers who are college graduates have personally experienced the benefits of a college education and want to ensure their grandchildren experience the same benefits, says MetLife.
In light of the 45-64 age demographic faring better financially than the 25-44 age group, it makes sense that many grandparents are helping out their kids by taking care of grandkids, says MetLife. A recent U.S. Census Bureau report shows a 64% increase in the number of children living with their grandparents in the last 18 years. The MetLife report says about 11% of households headed by a grandparent include a grandchild living within that household, and this is attributed to recession-driven high unemployment rates among grandchildren’s parents.
View the report here.
Written by Alyssa Gerace