Ask almost any grandparent about their grandkids and you will immediately see their eyes light up. Most say they they’re ready, willing, and eager to help out their families, happily giving both time and money. Many give abundantly, sometimes, even at the expense of their own financial well-being.
With over 65 million of us (myself included) spending some $3.2 trillion annually, it’s a demographic that should not be ignored, say marketing experts. Whether it’s toys, travel, financial services, clothing or other goods, grandparents are a willing group of consumers, caregivers, and crucial source of support for families.
About 61 percent of women and 57 percent of men in the U.S. are grandparents, according to the U.S. Census Bureau. The average first-time grandparent is around 50, but regardless of age, “the power of grandparents in a child’s life is huge,” said marketing expert Lori Bitter, author of The Grandparent Economy: How Baby Boomers are Bridging the Generation Gap. “Marketers need to remember there is a huge segment of this population that’s still working and has disposable income and they’re spending on everything.”
Today’s grandparents are more likely to spend on extras like music or sports lessons, rather than saving up to hand over a big chunk of money for that first car or sweet sixteen party, as our own grandparents may have done. And, at a time when boomers should be thinking about their own retirement, “we’re still spending on our grandchildren and they’re getting bigger and their asks are bigger,” Bitter said.
That’s just one of many ways grandparenting is evolving, as more and more Baby Boomers transition into this new life stage. The typical U.S. grandparent has four grandchildren; the largest segment (56 percent) have grandkids between ages 6 and 11, followed by age five or under (53 percent) according to a study from Generations United and Met Life. Two-thirds have at least one grandchild within easy visiting distance (less than 50 miles), but nearly 4 in 10 have at least one grandchild more than 500 miles away. About 2 in 10 live in multi-generational households.
“The intimacy and closeness between the Boomer generation and their children sets the stage for a whole new way of grandparenting,” said family and relationship expert Jane Isay, author of Unconditional Love: A Guide for Navigating the Joys and Challenges of Grandparenting Today. Since today’s parents often both work for economic reasons, they need their parents more than we did, she said. “They need their time, they need their money.”
Many boomer grandparents still work, so can’t babysit daily. “You find other ways to help, perhaps on weekends or taking a vacation with your grandkids to give mom and dad a break,” said Isay.
And those working grandparents are doing things differently. Older people are starting their own businesses, turning hobbies into second jobs, and finding flexible income opportunities, because the financial need is still there, Bitter said.
She thinks marketers are missing a huge opportunity. Suddenly there’s a whole new group looking at online sites with clothes, and thinking about holiday gifts. They are in the market for things that they haven’t thought about for 30 years. “And everything has changed.”
There are 108.7 million people in the U.S. age 50 or older, according to AARP. About 40 percent of those 55 and older were working or actively looking for work. They plan to keep working, and keep spending. This labor force participation rate is expected to increase fastest for the oldest segments of the population—most notably, people ages 65 to 74 and 75 and older—through 2024, according to the Bureau of Labor Statistics.
These Boomer-grandparents are still the leading consumer generation for products like blue jeans and household goods. “I find it fascinating that at a time when Baby Boomers should be the sort of consumer category that everyone should be talking about, so many marketers are talking about millennials,” Bitter said.
Those are our children, and we’re the ones buying clothes and toys for their children. “Follow the money and know where it’s coming from,” she advised.
Boomers don’t necessarily want to chuck it all for palm trees and sunshine. A 2016 Home Advisor report found 61 percent of homeowners over the age of 55 plan to stay in their homes indefinitely, rather than move. Nearby grandparents provide an extra set of hands to help with child care now, and know that adult children are nearby should they need caregiving themselves.
When making life decisions, Isay stressed the importance of grandparents focusing on their own needs first. “Don’t put your retirement in jeopardy,” she said. You have to weigh that post-college trip to Europe against a more secure future. “Otherwise, you may become a financial burden to your children.” She suggests leveling with your adult children about what you can and can’t afford, and setting realistic expectations.
According to Bitter, the financial services industry must do a better job of helping boomers at or near retirement plan for themselves and for any legacy they want to leave their grandchildren. We may have some 401K savings but we don’t necessarily know what to do with it once we retire, she explained. “All of a sudden we’re in this whole new place and we’ve got some money and maybe some time, but businesses haven’t done a great job understanding when we go from one life stage to another.”
Boomers want to be able to ask questions and not feel stupid, she said. “Many of us are not that financially savvy and feel embarrassed, but nobody’s stepping up to be their lighthouse.”
However, today’s grandparents don’t want generic solutions. They want authenticity, not canned formulas; a point many marketers seem to be missing.
Many more life stages happen between ages 50 and 100 than earlier in life, Bitter said. And often, we move in and out of them, such as with marriage or caregiving. But once you become a grandparent, you’re a grandparent until the day you die. What is the lifetime value of that consumer?