Grandparents providing more financial support due to economic downturn
17th September 2012 · 0 Comments
Grandparents in the U.S. are increasingly providing vital support for American families and have taken on the role of a financial safety net for their children and grandchildren, in some cases to the detriment of their own finances, according to “Grandparents Investing in Grandchildren: The MetLife Study on How Grandparents Share Their Time, Values, and Money.” It was conducted by the MetLife Mature Market Institute in conjunction with Generations United, a multi-generational advocacy organization.
According to the study, Americans feeling pressure of the slowed economy and high unemployment, are turning to their parents and grandparents for support. Two in 10 (20%) grandparents surveyed are living in multi-generational households and 13 percent of grandparents provide care for at least one grandchild.
Sixty-two percent of grandparents have provided financial support to grandchildren in the past five years, averaging $8,289, primarily for investments and education. Forty-three percent of those surveyed attributed the economic downturn as the reason for monetary support; 34 percent are helping despite their belief that such assistance is having a negative effect on their own finances.
The study also notes grandparents are making added use of technology to interact with their grandchildren, albeit reluctantly in some cases. Though they prefer face-to-face communication and the traditional phone call, 12 percent are using Skype, 31 percent use e-mail and 24 percent use Facebook. None reported communicating via Twitter. The majority of grandparents living within 50 miles of their grandchildren see their grandchildren in person at least a few times a month.
“The good news is that both in person and via technology, grandparents are forming deep connections with their children,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “The bad news, however, is that grandparents are making financial sacrifices that could cost them when they find themselves short of the savings they need to support themselves in retirement. There is a need to balance what they’re giving with what they can afford to give. It’s recommended that grandparents seek financial advisors and education resources to guide them through the process of giving.”
“Because grandparents can play such an integral role in the lives of their grandchildren, it’s incumbent on parents, the generation in the middle, to encourage and facilitate greater interaction among the generations, whether face-to-face or virtual,” Timmermann continued.
The study also found that grandparents are eager to pass on more than money. Almost all are eager to impart a value system with the following ideals topping the list: honesty (88%), good behavior (82%), voting (73%),self-sufficiency (70%), higher education (69%) and good health habits (68%).
Grandparents say it’s important that their grandchildren maintain their standard of living; 67 percent are optimistic their grandchildren will live as well as they have — believing family values, parental influence and support will play a role. Those who are pessimistic on this point blame external factors like the economy, government and society.
“The importance of grandparents remains as it has for centuries: they are a source of family history and values for their grandchildren,” said Donna Butts, executive director of Generations United.” Even today, in a quickly changing world, grandparents play a distinct role in guiding their grandchildren on integrity, the importance of education, community service and in this election year, the need to be engaged in civic affairs by voting.”
Other key findings from the study include:
• Grandparents have an average of four grandchildren. Most have one or more between the ages of six and 11 (56%), followed by age five or younger (53%). Twenty-eight percent have adult grandchildren over the age of 21.
• The majority of grandparents (59%) have at least one grandchild living within 50 miles; eight percent live in the same household as at least one grandchild. Long-distance grandparents are still a significant segment; 39 percent have a grandchild more than 500 miles away.
• Of the 13 percent of grandparents who provide regular care for at least one grandchild, 58 percent say they do so because they enjoy it. Seventy-four percent babysit or provide care on a weekly basis. Fifteen percent say they are raising one or more grandchildren.
• Of the 20 percent of grandparents living in multi-generational households, 30 percent have grandchildren living with them; 35 percent live with an adult child only.
The MetLife Mature Market Institute’s prior research on grandparents in the U.S., which includes a number of studies, can be found at the Institute’s website. These include: The MetLife Report on American Grandparents: New Insights for a New Generation of Grandparents (2011), From Generation to Generation: Grandparents Imparting Lessons, Legacy, and Love, A MetLife Survey of African-American, Asian Indian, and Chinese Grandparents (2010) and Grandparents: Generous with Money, Not with Advice (2009).
The findings in Grandparents Investing in Grandchildren: The MetLife Study on How Grandparents Share Their Time, Values, and Money are based on an online survey conducted by Harris Interactive on behalf of the MetLife Mature Market Institute between April 4, 2012 and April 11, 2012. The nationally representative sample included 1,008 grandparents age 45 or older who were selected from among Harris Interactive’s online research panel. The data were weighted to be representative of the general age 45 and older population (not just the online population) of the U.S.
This article was originally published in the September 17, 2012 print edition of The Louisiana Weekly newspaper