Updated January 2017 — As the bulk of the Baby Boomer generation transitions into the role of grandparents, there’s little doubt that their grandchildren will benefit financially.
After all, Boomers in the U.S. are expected to transfer about $30 billion to heirs over the next few decades, according to Accenture. A significant portion of that wealth will likely be used on gifts, travel, and education funds for grandchildren.
“There are more grandparents, and they’re generally more financially successful and secure than previous generations,” says Arne Boudewyn, Head of Family Dynamics, Education, and Governance for Abbot Downing. “They are also living longer. As they’ve become a powerful segment from economic and longevity perspectives, they’ve become increasingly influential in other ways, as well.”
If you’re thinking about how best to give financially to your grandchildren, planning and considering your goals for the gifts are important steps.
But if you’re looking to make your mark in additional ways, here are four ideas on how to positively influence your grandchild’s life.
1. Healthy habits equate to more quality time with grandchildren.
Staying active and investing in your own health enables you to be an important part of your grandchildren’s lives. It’s the same advice that new parents get: Take care of yourself so you can take care of your children.
After all, people are living longer. The average life expectancy of a 65-year-old American woman is 86.6 years, and it’s only slightly less for men. Developing or maintaining healthy habits contributes not only to longevity, but to your energy level as well.
Use that added pep in your step to bond during outings and playdates. If you’re a grandparent who’s used to traveling for business or pleasure, leverage that on-the-road wisdom to plan adventures with your grandchildren.
2. Don’t just give. Teach.
“Frequently we prioritize the practical matters of setting up trusts or gifts, without considering the broader concept of preparing beneficiaries, including the chance to educate in both informal and formal ways,” says Boudewyn. Your grandchildren may go through phases of not wanting to listen to their parents’ advice or yours, but they’ll likely still have an ear open to your wisdom over time. It’s important to pass down knowledge about finances and lessons you feel are important to their growth as responsible individuals. “Don’t forget to include stories about important lessons learned as part of your own financial journey.”
If you own your own business, show your grandchildren the handsome rewards of hard work, and how dealing with people is as important as the financial decisions you’ve made over the years.
“They will benefit from becoming familiar with the history and values that have proven important to managing wealth and your family legacy from one generation to the next,” Boudewyn adds.
“There are more grandparents, and they’re generally more financially successful and secure than previous generations. As they’ve become a powerful segment from economic and longevity perspectives, they’ve become increasingly influential in other ways, as well.” — Arne Boudewyn, Abbot Downing
3. Don’t just teach. Learn.
The rules of parenting change with every generation. Need proof? Compare the guidelines on car seats today to those when you were raising your children.
Now that they’re parents, your kids may have different ideas than you did on sleep habits, discipline, and medical care, based on what they’ve learned from their pediatrician and other professionals.
Not sure what swaddling is? Need ideas for talking to a tween granddaughter being cyberbullied? Some hospitals and other associations offer classes to grandparents to keep them in touch with the latest methods of child rearing. The more you understand, the easier your relationship with your child — and by extension, your grandchild — may be.
4. Think about the generation in between.
A new child creates a host of new expenses and challenges for parents. Sometimes, the best way to make a grandchild’s life better is by helping his or her parents out — whether financially or emotionally — without taking on a parenting role.
When it comes to gifts to grandchildren, it’s good to make sure everyone is on the same page. Consider how the parents feel about certain gifts. You may want to buy your grandchild every new toy or the latest tech gadgets you can find, but take time to consider whether that is infringing on the parents’ values and aspirations for their child. Work in partnership, not in competition.
Whether financial or emotional, the impact you’re likely to have on your grandchild is sure to be profound. Financial planning can help you answer questions on how to best transfer assets. Further planning, and conversations with your grandchild’s parents, can help you have a happy transition into being a grandparent.