Retirement Blog

Finance Blogs » Retirement » Dollars for the grandkids

Dollars for the grandkids

By Jennie L. Phipps · Bankrate.com
Wednesday, July 27, 2011
Posted: 2 pm ET

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.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
3 Comments
sandwich parent
August 06, 2011 at 3:25 pm

My father is helping pay our son's tuition for special education school and it is so true that the grandparents are often in a better financial position. It's not true what Diane says that kids are spoiled and given everything -- those who claim everyone else is spoiled are actually deprived and struggling financially with no hope of help. Just look at her bitterness. Just because some can get help does not mean they are spoiled. We just have the grandparents with the means. And most grandparents are pretty tight fisted because they are worried about their future. Our housing is not as nice as when I was a child. My family lives less well. We are only getting help with tuition despite the wealthy grandparents.

Diane Clubb
July 28, 2011 at 12:06 am

Are you kidding us all? You need a reality check, most of us are just getting by in life financially. If were lucky were working but there are no thrills inlife---no extras. Just barely making it paying the essential bills and necessities of life. We are lucky, actually luck had nothing to do with it. Hard work and pinching pennies had everything to do with our good fortune.

I believe the kids of todays are spoiled rotten--given everything. They have no true value of money--why should they never had to work for a dollar. No one gave me anything in life--no college funds, nothing. I have done well in life and my motto is " God bless the child that has his own"