Schlossberg, a widow who is retired from her job as a professor of counseling psychology, is trying to figure out how she can afford to keep up the tradition. "I am working with my financial planner on how I can help pay for their college when they are ready. I don't know if I can swing the whole thing. But my kids are understanding, and they would never want me to spend money than I need for living expenses," says Schlossberg, author of Revitalizing Retirement.
Many grandparents who are retired or nearing retirement find themselves in a situation in which their grandchildren need their help, financial and otherwise. It's a dilemma, because grandparents have to balance their grandchildren's needs and their own retirement savings.
Grandparents have been helping with grandchildren through the ages, often acting as "a safety net for their families," says
The most recent
About 11% say they have grandchildren living with them; 16% say they provide day care for their grandchildren,
Goyer says there are many different situations that lead to grandparents rearing grandchildren or contributing significantly to their upbringing: An adult child may have financial problems or have gotten divorced and need help. In some cases, both parents are in the military and may be deployed. Or an adult child with children may have lost a job, have a health problem, be dealing with substance abuse, be incarcerated or have passed away, she says.
"When you talk to these grandparents, some of them are so stressed out that they immediately start talking about the challenges they face," Goyer says.
They may be struggling with the costs of clothing, food, housing, education, child care and health care, she says. And they may have a grandchild born with a drug or alcohol addiction or other health or emotional issues and need expensive medical and mental health help.
But even grandparents who are overwhelmed by the challenges often point out that their grandchildren are the "light of their lives," she says. They say things like, "My grandchildren are the biggest blessing in my life. They give me a reason to get out of bed every day."
Certified financial planner
In most cases, it's a very stressful situation, because the grandparents are withdrawing money from their retirement accounts faster than they had planned, he says. "It usually delays the clients' retirement," which for some means it never happens.
He has one client, a 70-year-old attorney, who is continuing to work to support his divorced daughter and her two children, who all live with him and his wife. "The bottom line is the grandfather is doing what he has to do. He'd be retired if he could be, but he doesn't feel like he can because of the outflow of money to his daughter and the grandkids."
Retirees need to be realistic about their financial help, she says. "A big issue that I see is grandparents being asked to co-sign on student loans. This is usually a very big mistake," Carrozza says. "Come up with an amount that you can comfortably part with and offer to cover your grandchild's books or other more manageable expenses," she says.
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