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Retirement Fund vs. College Fund
Do Grandparents Raising Grandkids Have to Forfeit Retirement?
Visions of retirement don't typically include attending parent-teacher conferences and helping with nightly homework. Yet for more and more senior citizens, that is the reality. During the past 10 years, the number of children being raised in grandparent-headed households has increased by 30 percent.
Being thrust into the role raises many tough issues for grandparents. First and foremost, how will they afford retirement while handling the added expense that comes with raising a family? Providing food, shelter and clothing for kids is expensive, and the average income for grandparent-headed households is usually under $20,000.
Financial expert Chris Farrell, host of Twin Cities Public Television's Right on the Money!, urges grandparents to think of themselves first. "You can't help your grandkids unless you've taken care of yourself," he says. "While your inclination is to put the child's needs ahead of your own, you actually are serving them better by looking out for yourself first."
With that in mind, Farrell offers five practical suggestions for grandparents who face this situation.
Still others imagine they should forsake funding their retirement and be putting money into a college fund for their grandchildren. But this isn't the best use of their money either. "The child can borrow to go to college," says Farrell. "The grandchild will have more time to pay back the student loan as opposed to a grandparent who faces a more limited time frame."
