Being a Grandparent Can Take a Big Toll If You’re Not Careful

What's Hot


5 Reasons to Shop for a Home in DecemberFamily

Shoppers Boycott Businesses Selling Trump-Branded ProductsBusiness

Giving Thanks: Why Foreigners Find America AmazingAround The House

Why Washing Your Turkey Can Make You IllFamily

50 Best Gifts Under $25 for Everyone on Your ListFamily

Pay $2 and Get Unlimited Wendy’s Frosty Treats in 2017Family

What the Richest 1 Percent Earns in Every StateFamily

10 Ways to Retire Earlier Than Friends on the Same SalaryGrow

The 10 Best Ways to Blow Your MoneyCredit & Debt

7 Foods That Can Lengthen Your LifeFamily

The 50 Hottest Toys of the Past 50 YearsFamily

New Email Phishing Scam Targets Amazon ShoppersMore

7 Government Freebies You Can Get TodayFamily

For many seniors it's tempting to spoil the heck out of the grandkids, but it can do real damage to your retirement finances. How to express your love in a meaningful and affordable way.

“Children are often spoiled because no one will spank grandma.”

I smile every time I see that quote. I know my own mom loves nothing more than spending time with — and spoiling — my two young kids and her other grandchildren.

According to my folks, being a grandparent is pretty much the best thing ever. My mom says it’s way better than being a parent because you can love and dote on the kids, then send them back home with their parents.

I must admit, that does sound pretty amazing.

But there’s a monetary cost associated with being a grandparent who loves to spoil the grandkids. And if grandma and grandpa don’t keep the spoiling in check, they run the risk of taxing their own limited resources, says The Motley Fool.

An AARP study found that 1 in 4 grandparents spend a whopping $1,000 or more each year on their grandkids.

“And considering that many grandparents are also retirees, that’s a lot to spend for folks living on a fixed income,” The Motley Fool says.

Although many grandparents are shelling out for the traditional birthday gifts and holiday presents, more than half (53 percent) of those surveyed by AARP said they’re writing checks for their grandkids’ educational expenses and 37 percent said they’re providing money for day-to-day living expenses.

All that generosity can take a significant toll on older Americans’ finances. Says The Motley Fool:

Imagine you become a grandparent at 52, only instead of saving an extra $1,000 a year for retirement, you spend that money on your grandkids. Assuming you’re looking to retire at 67, and that your investments could’ve generated an average annual return of 5 percent, giving your grandkids that money means losing out on about $21,600 in retirement income.

Now let’s visit another scenario. Imagine you’re already retired and living on a fixed income of $2,000 a month between your Social Security benefits and your retirement savings. Spending $1,000 a year on your grandkids means parting with over 4 percent of your income — and that’s probably not something you can afford to do.

If you’re a grandparent who loves spoiling your grandchildren, that’s great, as long as you’re not putting your own financial health at risk. If you’re the parent of a spoiled grandkid and you’re worried about your folks’ (or your partner’s folks’) spending on your kids, don’t be afraid to speak up.

“Reinforce that your children love spending time with their grandparents as much as they like spending money (a fact you can remind your children of as well),” says Time. “Sometimes grandparents (and parents) forget that it’s the thought that counts, and get caught up in expectations that can be corrected.”

Check out “Grandparents: Here’s Why You Should Talk Money With the Grandkids” and “Here’s the Ideal Gift for Your Grandkids.”

Are you a grandparent who loves to spoil your grandkids? How do you keep your spending in check? Share your comments below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: 3 Tips to Help You Find a Job in Retirement

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,775 more deals!