A senior woman laughing and dancing with her granddaughter.

Filling the Nest: Caring for Grandchildren During Retirement

Many grandparents are finding that their empty nests are getting crowded, at least during workday hours. Almost 40% of grandparents in the United States report that they are providing daycare for their grandchildren on a regular basis. With costs rising and many daycare providers still reeling from the impact of the COVID pandemic, it’s no surprise that many grandparents are taking on the caregiver role.

Can you afford to retire to care for your grandchildren?

While the question isn’t complicated, the answer is – it depends! There are many aspects of this decision that you should consider before you commit.

Most importantly, if you are called on to care for your grandchildren and need to retire to do so, you’ll need to make sure that you have enough saved in your retirement accounts to sustain you throughout your retirement years. One of the best ways to plan for retirement is to take a close look at your needs taking into account spending plans, how you will withdraw funds, and how much of your income you will need to replace in retirement.

You also need to determine when you are eligible to collect any benefits that are age dependent, especially if you are retiring earlier than anticipated. The timing of your retirement to provide childcare may not be ideal. Withdrawing early can trigger penalties or possibly reduce your benefit in the case of Social Security.

Any benefits that you may leave on the table in order to retire should be weighed against how much your family will save if you care for your grandchildren rather than paying for childcare. It may not be as significant of a savings as you anticipate.

Will you be able to balance the demands for your time with your priorities?

One of the biggest considerations you will need to weigh is how much time you are willing to dedicate to your grandchildren and if you are willing to give up the free time you may have otherwise had in retirement if you were not caring for them on a regular basis.

Your love for your grandchildren is sure to sway your opinion, but you need to be honest with yourself about the significant commitment required to provide daily childcare and whether you are fully on board with the sacrifices it will entail.

A compromise may be the best option. For example, you could decide to cover a portion of your grandkids’ care and have them attend daycare part of the week to give you a much-needed break. Or maybe another family member could split the responsibility with you to ease the burden. Whichever scenario you choose, it is important to recognize that you will need to schedule time for your own leisure activities, vacation and travel plans, medical appointments and household chores and maintenance.

Life throws a curveball

It is also important to anticipate events that could change childcare arrangements. If you discuss how you will handle unexpected life events ahead of time, you are much more likely to be able to successfully navigate them in the moment.

Consider how you will react if your grandchildren no longer need care because one parent decides to stay or work at home or takes a different job which requires them to move. Will you resent having retired earlier than planned if your caretaker role is diminished or terminated?

What will happen if you’re unable to care for the grandchildren either short or long term due to health concerns or waning stamina? Will your children be able to pivot quickly to secure care for your grandchildren?

Consider this!

If you decide to retire to care for your grandchildren, you should talk openly with your children about roles, responsibilities, and any boundaries that may need to be put in place.

  • Will you accept compensation for your time? This can be an awkward conversation to have, however, it is an important one. Payment may come in the form of in-kind services. Your children could take on some of the burden of caring for your home or do your grocery shopping to free up time.
  • Even though you likely have a strong relationship with your grandkids you will need to discuss how to handle disagreements about your rules and approach to discipline. Will your children support you and coach the children without becoming biased? Will you be able to accept constructive feedback or change your views to meet parent wishes?
  • You will have to work together to communicate care plans around feeding, screen time and chores and be able to discuss issues openly when communication breaks down.
  • Where will you care for your grandchildren? In your home, or at theirs? If you are going to care for them at your home, you will possibly need to be prepared to childproof your living areas and be willing to make room for all the toys and supplies needed to care for and entertain your grandkids.
  • You may be called on to facilitate play dates, afterschool clubs and activities, meal planning and homework coaching. Many of these activities can require a significant amount of patience and stamina. Are you up for the task?
  • If your grandkids are young infants or toddlers, you will need to have the patience and mobility to guide and supervise play. Are you able to lift the children, prepare meals and snacks and bathe and attend to their toileting needs?

Caring for your grandchildren is sure to be a rewarding and fulfilling experience. With a bit of planning, a dose of patience, and open communication, you can play an essential role in their upbringing while also reducing stress for their parents.

Working with a Bankers Life representative can help you learn about retirement plans and decisions that could help with retiring. A Bankers Life representative can be by your side every step of the way helping you to navigate the process. Learn more about our services here.