Funny about Money

The only thing necessary for the triumph of evil is for good men to do nothing. ―Edmund Burke

Retirement When You’re Raising Your Grandchildren

2.5 million seniors nationwide are raising their grandchildren. A fifth of them do so with incomes that fall below the poverty line. Whether your grandkids live with you on a permanent basis, accompanied by their parents, or as a stop-gap measure while their parents get back on their feet, raising young children can affect your retirement plans. Because children are not disposable, you should assume that your grandkids will be with you until they are 18. If you’re wrong, you’ll have extra money. If you’re right, you’ll have the funds you need to help your grandchildren make it to adulthood.

Brush Up on Parenting

It’s been a long time since you’ve parented children, and things have changed. From recommendations about safe sleep positions for babies to expectations about discipline and extracurricular activities, it’s time to brush up on your parenting skills. Consider taking a parenting class, and recognize that no one can know it all—even if they’ve raised children before.

 Balance Work and Childcare

One of the first considerations when you’re raising a grandchild is whether to return to work. Childcare is costly, so look into alternatives, such as a state-funded preschool program or aftercare at the local public school. You may also want to consider alternatives to full-time work, particularly if you’re committed to remaining retired. Consulting, selling items on Ebay, or working part-time for a former employer may work well. If you are married, it might be ideal for one partner to return to work while the other raises the grandkids.

 Look Into State and Federal Funding

A number of state programs assist grandparents raising grandchildren, particularly if they are low income. Your grandchild may be eligible for Medicaid or for Temporary Assistance for Needy Families (TANF). There may be other programs available in your state, such as grants for families whose grandparents keep children out of foster care. Consider contacting your state’s department of child and family services to explore state funding options.

There is also a variety of federal assistance programs that may help grandparents fostering their grandchildren.

 Find Additional Income Streams

In addition to returning to work, working part-time, and exploring state funding, explore other options. A home equity line of credit can give you significant wiggle room. You might also consider selling your home, downsizing to a cheaper car, or renting out a room in your basement.

Another option is a reverse mortgage. If you’re over 62 and own your home, you can tap into your home’s equity to fund expenses, renovate, open a college fund for your grandchild, or pay down debt. You don’t have to repay the loan until you sell your home, offering you significant flexibility for financially assisting your grandchildren.

 Scale Back on Expenses

Balancing the financial demands of raising your grandkids is ultimately a simple equation of money in and money out. Some simple strategies for reducing expenses include:

  • Getting rid of cable and watching videos online instead.
  • Cutting down to one car. Services like Uber can take you just about anywhere you need to go.
  • Eating out less, and pre-preparing meals.
  • Finding free entertainment—classes at the community center, walks in the park, free outdoor concerts—instead of costly after-school activities.
  • Buying online whenever possible. Many seniors are reluctant to lean too heavily on technology, but programs such as Amazon’s Subscribe and Save can greatly reduce the money you spend on everyday purchases.

Consult a Lawyer and an Accountant

Taking in your grandchildren may affect your tax bill – sometimes for the better, because you may be eligible for certain tax breaks. As usual with income taxes, it’s complex; you should not fail to talk with an accountant.

Additionally, there are legal issues that you should hash out before certain occasions arise. For example, in my state a child’s parent or legal guardian must sign before the child can get a learner’s permit to drive , for some kinds of medical care, and even to transfer a child to a new school. It’s important to be aware that simply being a child’s grandparent does not give you legal rights. At the very least, you will need a power of attorney. If the parents are putting up their kids with you because of drug problems, alcoholism, imprisonment, or illness, you should be sure you have the authority to OK surgery and dental work, to approve a learner’s permit, and to make decisions about the kids’ education, healthcare, and support. This may entail obtaining legal guardianship or adopting.

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