BY JAIA PETERSON LENT – Generations United
You did what you were supposed to do. You’ve been saving for retirement. It’s all planned. In just a few years, you can start traveling, relaxing, and spontaneously visiting your grandchildren. Then, at midnight, the phone rings. Your child is in trouble. Your grandchildren can’t stay with their parents. In an instant, you agree for them to stay the night with you. That night turns into weeks, then months, then years. Now, instead of saving for retirement, you are focused on paying for formula, diapers, and school clothes.
You are not alone
About 2.7 million grandparents find themselves responsible for their grandchildren. We call these Grand Families. In addition to the day-to-day emotional, physical, and social challenges that come with this life change, the economic impact of unexpectedly raising your grandchildren can be transformative. It may mean the retirement planned for 65 is delayed into your 70’s. Some grandparents may be unable to work and may need to turn to Social Security Disability or Temporary Assistance to Needy Families. Others may need to become licensed foster parents of the children to secure needed financial supports and services.
Your financial contributions accumulate
“The majority (62%) of grandparents have provided financial support or monetary gifts within the past five years. Among those, the average amount given for all grandchildren was $8,289.”
Whether raising grandchildren full-time, part-time, or just visiting occasionally, grandparents contribute financially to children’s lives in a variety of ways. In fact a study conducted by Generations United and the MetLife Mature Market Institute shows that the majority (62%) of grandparents have provided financial support or monetary gifts within the past five years. Among those, the average amount given for all grandchildren was $8,289. Cash was the most common type of financial support, and helping with basic needs rose to the top with 43% of grandparents giving for clothing, 33% for general support, and 29% for education.
Grandparents can also play a role helping their grandchildren develop healthy financial habits early by talking with them about the value of saving, giving, investing and making wise spending decisions.
Financial resources for grandparents
Whatever way you find yourself contributing financially to your grandchildren, here are a few resources to help:
Financial Resources:
- Grandparents Investing in Grandchildren Tip Sheet
- American Consumer Credit Counseling
- The Benefits of Social Security for Grandfamilies
- Grandfamilies and TANF (Temporary Assistance for Needy Families)
Tax Credits:
- Earned Income Tax Credit,
- Adoption Tax Credit
- Child Tax Credit
Teaching your Grandchild about Finances:
- Enhancing Your Retirement: Helping Ensure the Financial Success of Youth
If you’re in a situation that absolutely requires you to care for your grandchildren long-term, these resources may help you avoid a severe financial strain; and if you are helping out financially, these resources may help you determine better ways to help. In both instances, protecting your own financial stability is vitally important.
Jaia Peterson Lent is Deputy Executive Director, and Alan King is Communications Specialist, of Generations United (GU), home to the National Center on Grandfamilies, and a leading voice kinship caretakers.
