“I just want you to tell me I can be a grandma,” Sandy exclaimed. .

Slightly puzzled and intrigued, I replied, “OK … but my notes tell me you already are four … and soon to be five times over.”

She chuckled, “I am … but this time I am thinking about going part-time or even retiring early in order to watch my granddaughter this fall.”

Fortunately, it wasn’t the first time I was faced with the “grandma decision,” and I was prepared to walk her through the personal and financial ramifications of such as decision. It’s a situation more and more advisors are also facing and they need to be prepared to hold honest conversations with clients about the potential impact.

One of the most challenging aspects of the decision is the dichotomy that is created between the emotional pull to help and support and the financial tug to save enough to feel secure well beyond a grandchild’s youth. 

It’s very similar to what happens when you loan a family member money. On the surface, its kind and helpful … as long as they follow through, and things work out like they’re supposed to. However, without a solid payment plan, level of accountability and plan for what to do if things go wrong, it can quickly become a relationship killer. 

Having gone through this situation both personally as well as helping others professionally, it really can be a sticky situation with a lot of factors to consider, some of which may create heated debates and differences of opinion. The reality is, people create their own assumptions, and if those assumptions aren’t discussed, they turn into sources of frustration simply because they perceive that things aren’t working out like they expected. That can cause people to feel remorse and regret their decision, and that’s not a good way to start out a client’s grandma role. 

Generally speaking, a lot of grandmothers faced with this situation are close to Social Security’s full retirement age and Medicare eligibility, which makes retirement a very real possibility. Their proximity to these entitlements, combined with the maternal instincts to both help their kids out financially—by reducing daycare costs, for instance—and a deep desire to connect and bond with a new grandchild, can in fact make the decision seem like a no-brainer. 

But it’s not that easy. Oftentimes, the very reasons a new grandmother may be inclined to make such a move can backfire, leaving her personally and financially frustrated, and second-guessing her decision once she feels its impact. 

While the tradeoffs are not easily quantified, there a several things grandmas do need to examine before making such a transition, including: