Some 13 percent of grandparents struggle with the financial expectations of being a grandparent. For some, helping a grandchild means taking on debt or diverting a significant portion of savings or income to family, making it more difficult to save for retirement or even manage their own day-to-day expenses. For example, 7 percent of grandparents have taken on debt to help their grandchildren pay for college.
One-in-four of those grandparents have co-signed private student loans for their grandchildren and/or incurred credit card debt that has not yet been paid back in full.
Financial challenges are greatest for those who take on caregiving responsibilities for their grandchildren. Eleven percent (7.7 million) of grandparents have grandchildren living with them. For those who care for their grandchildren, financial burdens are a big challenge.
One-in-five grandparent caregivers (22 percent) say the financial cost of being a grandparent can be too much, the AARP reported. The median income for grandparent caregivers is $51,448 per year and only $37,580 where a parent of the grandchild is not present.
Many caregivers are in their prime retirement savings years—with four in ten still in the workforce—but rather than continuing to save they find themselves providing for their grandchildren, AARP found. Retired caregivers living on a fixed income may not have the finances to take on the extra expenses of raising their grandkids, the association said.
The online survey of 2,654 grandparents ages 38+ was conducted by the AARP between August 20 and September 4, 2018.