Grandparents Spend $27.5 Billion Per Year on Grandkids
SACRAMENTO, Calif., Sept. 4 /PRNewswire

72.2% of Grandparents Wish They Could Spend More

There are 56 million Grandparents in the United States. On average $27.5 billion is spent nationwide on grandchildren per year. The economic impact could increase significantly if the same Grandparents were able to spend what they desired, according to a study conducted by two Sacramento State University professors on behalf of Liberty Reverse Mortgage.

In honor of Grandparent's Day on Sunday, September 9, Liberty Reverse Mortgage and Sacramento State University have compiled the second annual Grandparent's Cost Index(R).

According to the U.S. Census Bureau, more than 56 million grandparents reside in the United States. The purpose of the survey was to examine the amount of money that Grandparents spend on their grandchildren, what it is they spend their money on, and whether they feel like they are spending all they want or can on their grandchildren.

"Grandparents who have mortgages spend a lot less than those who do not," explains survey author Professor Dennis H. Tootelian, Ph.D. "The economic impact of Grandparent's spending is huge, and it continues to grow as the spending power of these Grandparents increases." Grandparents will often borrow to spend more money on their grandchildren.

"Liberty Reverse Mortgage works with clients 62 and older, and we've gotten pretty smart about what their needs and desires are," says Pete Engelken, President of Liberty Reverse Mortgage. "Grandparents do not have any extravagant needs, they just want to be able to provide for themselves and spend money on their children and grandchildren. They simply don't have the cash flow to accomplish this."

According to a study released by the National Reverse Mortgage Lenders Association, age 62+ U.S. households, which comprise the majority of grandparents, have $4.3 trillion tied up in their home equity. If they were able to tap into even a small percentage of this equity, it would have a big impact on the nation's economy. According to the Grandparents Cost Index(R) study, additional spending could reach up to $56.2 billion.