Not only are a substantial amount of grandparents functioning as caregivers for their grandchildren, the majority have provided financial support to their grandkids in recent years, and it’s endangering their own retirement security, says a September 2012 MetLife Mature Market Institute study.
“Grandparents give abundantly, sometimes to the detriment of their own current and future financial security,” says MetLife in the study, Grandparents Investing in Grandchildren. “Many are most likely not fully aware of the extent to which they are sacrificing their own financial security in retirement and may need support later in life.”
On a regular basis, 13% of grandparents provide care for at least one grandchild. About a third of those are babysitting five or more days per week, while 15% are raising at least one grandchild. Another 20% of grandparents say they’re living in a multigenerational household. Out of those, three in ten have grandchildren living with them.
Nearly two-thirds of grandparents, at 62%, have provided financial support or monetary gifts to their grandchildren in the past five years at a total average amount of $8,289.
More than four in ten grandparents (42%) said they are giving more financial support these days due to the economic downturn. A third believe that financially supporting their grandchildren is having a negative effect on their future financial security, but do so anyway.
“Many grandparents feel the current needs of their family outweigh their own future financial needs, [but they] should consider their own futures when planning gifts and support for adult children and grandchildren,” MetLife says. “If grandparents jeopardize their own financial security in retirement by giving too much to their families, they may someday be financially dependent on these loved ones, which isn’t such a gift in the long run.”
Written by Alyssa Gerace