As if dwindling retirement funds aren't enough to keep you awake at night, here's another financial stressor for many of you: grown kids.
In a nationwide survey of 10,000 older adults, nearly two-thirds (62 percent) say they've provided financial support to their adult children and grandchildren in the 12 months that ended in June, according to a survey by Grandparents.com made available to AARP Bulletin Today.
The survey of people ages 48 to 70 did not ask how much money they've provided to their kin, but it did reveal where those funds went:
- 70 percent gave cash for day-to-day expenses.
- 40 percent helped with mortgage or rent payments.
- 24 percent provided money for health care.
- 23 percent helped pay for day care costs.
- 21 percent provided funds for education.
Georgia Witkin, an assistant clinical professor of psychiatry at the Mount Sinai School of Medicine in New York and a senior editor at Grandparents.com, called the number of older adults providing financial support to their grown kids and grandkids unprecedented in recent times. But she also pointed out that many of today's grandparents are in their 50s and 60s, still working, and in a position to help.
"Grandparents aren't really elderly anymore," Witkin said. "So you're talking about people who tend to have jobs, have retirement security including nest eggs, pensions, Social Security. Their help used to be discretionary buying a grandchild's first car or helping out with college. Now it's really needed for the basics."
A separate poll released in July also found that grandparents have been a steady source of financial support to their grandchildren, giving an average $8,661 in the last five years, according to the MetLife Mature Market Institute, the research and educational arm of MetLife, a financial services company.
Nearly two-thirds of 1,077 grandparents age 45 and older polled said they provided money to their grandchildren for many reasons. Among them: general support (40 percent), education expenses (26 percent), major life event such as a wedding (21 percent), savings (13 percent), medical bills and car expenses (9 percent each).
Is your retirement at risk?
Are older adults jeopardizing their own retirement security by providing financial support to their adult children and grandchildren, particularly at a time when many are facing declining assets? Quite possibly, says Sally Hurme, a financial expert at AARP.
"If they're tapping into their retirement savings to help their children, then they're shrinking the amount of resources they're going to have for the rest of their lives," Hurme said.
"If they're still working," she said, "then obviously they may have to work even longer to give themselves more time to replenish the money they've given to their children and grandchildren that they should've been saving."
There are also tax considerations to keep in mind.
According to the Grandparents.com poll, grandparents not only gave financial assistance, but also helped their grown kids with caregiving. More than 60 percent of those surveyed said they were taking care of their grandkids on a regular basis. And 13 percent called themselves primary caregivers.
That may not be unexpected, given that the number of households with multiple generations living under one roof has increased by 25 percent this decade, according to an AARP analysis of U.S. Census data.
About 6.6 million children live in a household that includes a grandparent. And an estimated 1.5 million children live with a grandparent and not their own parent, census data show.
In March, theAARP Bulletin conducted a poll examining how the economy has affected the living conditions of people age 50-plus. More than one in 10 said they live with their grandchildren or their parents. When asked what would drive parents and children to move in together or with a friend, if they hadn't already, 34 percent cited loss of income.
Janet Peele, 58, was living alone until hard times fell on her daughter and son-in-law, Kara and Damon Mayer. They moved into Peele's home in Bellevue, Wash., with their three children when Damon's painting business dried up. Now Peele can't imagine living without her grandchildren, who range in age from 6 to 14.
"We sit around and watch TV or play a game, and more often than not they crawl into my bed," she said. "I don't think my grandkids or I could handle living without each other."
Tips for parents of boomerang kids
Experts offered these tips for parents when adult children move back home:
- Discuss shared living costs such as who will pay for food, rent, computer use and other expenses. Talk about how each of you expects life to change, including what you're excited about and what you fear.
- If you're helping with child care, establish how much time you will spend baby-sitting your grandchildren. Who will be responsible for cooking and grocery shopping? Talk about these issues openly to head off any conflict.
- Make the rules but allow your children to have input.
- Let your kids discipline their children without interference from you, a difficult but necessary rule in building a peaceful environment.
- Share stories, look at photos, research family history and record this information on audiotape or in a video. Treasure your time together.
Carole Fleck is a senior editor at AARP Bulletin Today.