We’ve heard about all the college grads moving back home, and about the sandwich generation caring for parents and children. But more and more, it seems to be the grandparents who are making the necessary sacrifices to ensure financial stability.
Grandparents helping their children and grandchildren is nothing new; that’s what family is for. But the extent of the support — whether it’s providing a place to live, caring for young grandkids, covering back-to-school shopping or paying college tuition — has increased with the fragile economy.
At the height of the Great Recession, nearly two-thirds of America’s grandparents were providing an estimated $370 billion in financial support to their grandkids over the previous five years, according to a  survey by the MetLife Mature Market Institute. That averages out to $8,661 per grandparent household.
According to a Pew Research Center analysis of the latest U.S. Census Bureau data, approximately 51 million Americans, or 16.7 percent of the population, live in a house with at least two adult generations, or a grandparent and at least one other generation, under one roof. The Pew analysis also reported a 10.5 percent increase in multigeneration households from 2007 to 2009. And a 2012 survey by national home builder PulteGroup found that 32 percent of adult children expect to eventually share their house with a parent.
“It used to be older people whose money had run out who were living with their children, and now it’s the next generation that can’t keep up,” says Louis Tenenbaum, a founder of the Aging in Place Institute, which promotes “multigen” remodeling.
And grandparents are thinking about their grandchildren’s future, as they are contributing to 529s more and more.
Parents still contribute the lion’s share of funds invested in 529 accounts. But contributions from grandparents now make up about 9.5 percent of the total, according to the most recent data from the Financial Research Corp, which tracks 529 investments. . . The trend isn’t lost on financial services companies, and many are starting to market 529 investment opportunities directly to grandparents as a result.
Here’s a list of guidelines for financially assisting children and grandchildren.