Becoming the Free Nanny to the Grandkids? Ask Yourself These 3 Questions First
Free childcare is a great gift, but don't let it ruin your retirement. Ask yourself these three key questions before signing up to be the nanny.
Spending time with the grandkids tops many retirees' wish lists, and so does helping their adult children out. So it would only seem natural to sign up to become a free nanny. You can check off both boxes, save your kids money, and bond with your grandchidren.
It's what financial planner Kelly Regan's parents have been doing ever since she went back to work at Girard, a Univest Wealth Division, about a year ago. To save $480 a month or nearly $5,800 a year on daycare, Regan's parents watch her 17-month-old twin daughters on Fridays. The arrangement works for both sides — Regan and her husband save money, and her parents get fulfillment from their granddaughters.
"We coordinate calendars about a month ahead, so if they can't watch them one Friday, my husband and I have time to pivot. We understand they're doing this for free and don't want them to miss out on things if we can find other coverage," said Regan. "We also bought a house 20 minutes from them three years before we had kids, knowing my mom had expressed helping. Being close makes it easy for them to come and go without long commutes."
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Depending on where you live, the age of your grandchildren and the kind of childcare they have, your adult kids could save a lot by having you babysit. The national average for childcare is $15,000 annually, and $17,000 for infants. In some cities, an in-home nanny can cost up to $60,000 per year.
3 Questions to ask before signing up to be the grandkids' nanny
While Regan's parents are OK with helping out one day a week, doing it full-time would be a different story. Regan said her mom does most of the caregiving and is usually exhausted at the end of the day. "Chasing kids, toddler meltdowns, and not sitting down is no joke," she said.
Caring for the grandkids full-time comes with other challenges. Expenses like transportation, meals and activities could put a dent in your retirement savings. Plus, it means less time to enjoy your own pursuits, something retirement is supposed to be about.
That's not to say it won't work out, but before you become a full-time babysitter for the grandkids, ask yourself these three questions.
1. Can I afford to help out?
Acting as the full-time nanny can save your adult children some serious cash, but you don't want it to come at the expense of your retirement. That's why the first question you should ask yourself is: Can I afford to help?
"A lot of times people talk about it as making a retirement choice, but they also have to protect their financial plan," said Regan. "Who is paying for transportation, covering the groceries, and the zoo memberships? All of that stuff can add up. You have to iron out the financial details."
2. Can I physically manage childcare?
Grandchildren are tiring, especially toddlers. Depending on your health and fitness level, it can be easy or extremely taxing. That's why the second question you should ask yourself is: Can I physically help with childcare for the schedule I've been asked to follow?
"If you are running yourself down caring for the grandkids, at what point does it cause health issues?" said Regan. If it does, can you afford the trips to the doctor's office or to the emergency room? Plus, if you get injured helping with the grandkids, it could prevent you from pursuing your own hobbies.
3. Do I have the time to help?
Caring for the grandkids is a big commitment. It usually means long days and plenty of notice if you have to miss one. It also means goodbye to spontaneous trips and the freedom that comes with retirement. It's a big trade-off, which is why the third question you need to ask yourself is: Am I willing to give up my freedom to care for the grandkids?
"The freedom component is very important here," said Frank Legan, partner and financial adviser at Signature Estate & Investment Advisors. "What will they be giving up by committing their time to caring for grandchildren?"
Before you say yes, think about what watching the grandchildren five days a week means to your social life, your alone time with your spouse, the pursuit of hobbies, and your own happiness. Resentment can breed bitterness, which could lead to family strife, something you likely want to avoid in retirement.
Set boundaries for success
Ultimately, stepping in as a full-time caregiver can be a rewarding gift to your family, but it shouldn't come at the expense of your own wealth, health and well-being. By setting clear boundaries, having honest conversations about finances, and finding a balance — whether that means helping out one day a week like the Regan family or several days — you can support your adult kids while still enjoying the freedom you worked so hard to earn in retirement.
Editor's note: This article is part of an ongoing series looking at three questions to ask yourself before making a major financial or lifestyle decision. The other stories in the series are:
Retirement readiness
3 Questions That Determine If You're Actually Ready to Retire Early
3 Questions to Ask Before Unretiring
Lump Sum vs Monthly Pension: 3 Questions To Ask Before Making a Permanent Mistake
Where to retire
Moving to Florida or Texas for Retirement? 3 Questions to Ask First.
3 Questions That Reveal If You're Actually Ready to Age in Place
Thinking About Moving Near the Grandkids? Ask Yourself These 3 Questions First
Retirement savings and spending
3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You
3 Questions That Help You Find Your Perfect Social Security Claiming Age
Go Ahead and Splurge, But Ask Yourself These 3 Questions First
Before You Give Money To Your Kids, Ask Yourself These 3 Questions
3 Questions to Ensure Your Retirement Nest Egg Is Inflation-Proof
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