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For a variety of reasons, increasing numbers of grandparents are raising their grandchildren. According to a survey completed in 2018 by the U.S. Census, 2.4 million grandparents were responsible for their grandchildren, particularly in states hit hardest by the opioid crisis. This role as primary caregiver to their children’s children may be temporary or permanent, but it is almost always financially challenging.

Even grandparents who consider themselves financially secure are likely to feel the pinch when they have to buy car seats and school clothes again.

If you have taken on the responsibility for raising your grandchildren, or expect that you may need to step into that role soon, it’s important to get a firm grasp of your financial situation now and seek out any assistance that may be available to you and your family. This will help you make ends meet and avoid derailing your retirement plans.

First, get control of your spending and avoid major purchases. For example, before remodeling or moving, try to use existing space in your home to accommodate the kids, particularly if you’re not sure how long they’ll be living with you. If the state is not involved in your situation, you’ll have more leeway to improvise. If the state has become involved, then this may not be possible. Government programs, such as foster care, might insist on separate bedrooms for boys and girls, specific furnishings, or other conditions.

If you’re fighting your children or the state for custody of your grandchildren, your situation is likely to generate legal fees. You can curb costs by using free or low-cost legal aid services. You may be able to get legal custody without a lawyer, or just hire one to review the forms you fill out. To find out if you qualify for free or low-cost legal help, contact the legal aid program in your area. Curbing legal fees is worth the effort since these costs alone can deplete your retirement savings.

Childcare is another expense that can be overwhelming. Many grandparents quit working simply because they can’t afford daycare. When they quit their jobs and stop contributing to Social Security and a company retirement plan, it decreases the income they qualify for in retirement. If you need childcare but can’t afford it, apply for free or subsidized services. Your local Child Care Resource and Referral service is a good place to start.

The bottom line for caregiver grandparents:

  • Review your financial situation and get your spending under control;
  • Avoid taking on large debts in your 50s or beyond;
  • Don’t sacrifice your retirement savings plan; and
  • Seek out all the available assistance you qualify for and apply for it.

© 2020 White River Credit Union