If your retirement planning doesn't include socking away a little money to help your grandchildren, it probably should.
There are 65 million grandparents today -- a record number -- up from 40 million in 1980. And an estimated 4.5 million households headed by people older than 55 include one or more grandchildren.
The MetLife Mature Market Institute analyzed these numbers and those that follow from the 2010 U.S. Census, as well as reports from the Department of Labor and the Centers for Disease Control. MetLife's own research predicts that there will be 80 million grandparents by 2020 -- or 1 in every 3 adults. While the majority of today's grandparents are women (124 grandmothers for every 100 grandfathers), the gap is expected to close because older men are now healthier and living longer.
While the real income of those ages 55 and over has risen in the last decade, that of their children has declined. Incomes of households headed by those ages 55 or older rose by $491 from 2000 to 2009, while those ages 45 to 54 had just a $42 increase. Those between ages 25 and 44 saw their incomes decline. One of the reasons is that the number of college graduates among younger men has remained the same as it was 30 years ago, making it more likely that grandpa is a college grad than dad.
This all boils down to the fact that grandparents are a significant source of support for their grandchildren. For instance, households headed by those ages 55 and older are now spending $2.43 billion annually on primary and secondary school tuition, about 2.5 times the amount of $853 million in 1999.
Sandra Timmermann, director of the MetLife Mature Market Institute, says, "The increased financial instability of today's younger families, has huge business implications. The fact that grandparents are spending a great deal of money on infant food and equipment, children's clothing, toys, elementary and secondary school tuition, and financial, mortgage and insurance products, represents a change in buying habits and may change the way marketers and advertisers focus their efforts."
In other words, lots of us who are living in retirement are going to return to the days of buying diapers -- and not just for ourselves.