By Benjamin Lamm
Grandparenthood no doubt brings with it some novel feelings. There is the initial joy not unlike the joy of brand new parenthood, as well as some added bonuses that parents don’t get.
Parents don’t have the leisure to come and go as they please and send the kids home when they get cranky, they have the liberty to spoil the grandkids and let the parents deal with the consequences, and the pure love that exists between grandparent and grandchild.
As the old Welsh proverb goes, “Perfect love sometimes does not come until the first grandchild”.
Why do grandparents spoil their grandkids? According to a recent AARP study, about 89% of grandparents admitted that they spoiled their grandkids. It seems that overspending is an inseparable part of grand-parenthood.
Additionally, many grandparents spend beyond their own means in an effort to help their adult children manage their varied expenses and may be in the early stages of their career.
Mature adults usually are more settled and feel that can afford to help their grown children and spoil their grandchildren although often that is not the case.
Rising costs of health care and increased longevity may mean digging deep into much-needed saving for the years ahead. Many seniors are finding that retiring any time soon does not look very probable. Adding overspending on their children and grandchildren onto their budget is often another reason for unnecessary stress.
Where can grandparents cut on spending?
- Quality time. We don’t have to break the bank in order to express our love and affection for our little one’s. Spending quality time should be an important part of the equation, as well.
Grandparents have the extra time to spend with the grandkids that parents often lack. Doing activities together or simply having a good time together; going for a stroll in the park or spending the afternoon in your living room with the old albums, going down memory lane with your young grandchild, can often be the most valuable gift that we can give them.
Spending time with our grandchildren is good for our overall well-being, too. As Gene Perret famously said, “An hour with your grandchildren can make you feel young again. (Anything longer than that, and you start to age quickly!)”
- Budget. It is common for grandparents to overlook their own financial needs in favor of gifting their grandchildren or helping their married children. It is important for seniors to add gifts as an expense in their budget and should be in line with other expenditures, says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial.
De Baca further asserts, “If you’re helping out because your adult children need financial assistance like private school or extra-curricular expenses for their child, it is important to have an open discussion about what you can and can’t afford.”
- Health care. One of looming expenses in a senior’s life is the expected cost of long term care. Much as we don’t love to think about requiring long-term care in our old age, 4 in 10 seniors are expected to spend two years in a long-term care facility.
The average American family may not have enough funds saved up for an extended assisted living or nursing home stay, which can run roughly $2,500-$3,500 monthly for assisted living and $6,200- $6,900 for nursing home care. Click here for more info on the cost of care. This leaves many with Medicaid as their safety net for long-term care.
The rules and regulations for what assets and income can be kept and what to do if one is slightly above the bracket can be quite complicated. There is much info available from the professionals in the Medicaid planning industry and it is important to plan for this expense in advance.
Conclusion: There no denying it, after everything is said and done, we love to shower our grandkids with gifts and attention. With the proper planning, we can save our retirement money for the fun things in life.
Benjamin Lamm is with Senior Planning Services, a NJ-based Medicaid planning company helping seniors and their families navigate the Medicaid eligibility maze.