Financial Service Insights For New Grandparents

It’s 2023, and the age of the grandparent has officially arrived. According to United Nations data examined by The Economist, there are around 1.5bn grandparents living in the world today.

Having recently become a first-time dad, my parents have now moved up the ranks, gaining their rightful titles of grandma and grandpa. The arrival of my son has been a wonderfully exciting change in their life —a mixture of delight and incredulity. But what I find most interesting is how the experience has sparked several conversations about how they want to retire, spend their money, and bequeath their assets.

Whether you’re a rookie grandparent or a seasoned pro, you’re likely to find yourself in need of financial service as your goals slightly shift. If you’d like to better prepare yourself for this new chapter, here are a few insights worth considering.

Update your estate plan

When you think of being a grandparent, you probably imagine hugs, cuddles, and kisses 24/7. And while all of these things are certainly part of it, entering grandparenthood (and parenthood!) does also encourage us to consider our own mortality and the type of legacy we may want to leave behind.

While this is not always comfortable contemplation, it is important to ensure the financial protection of your loved ones when you are no longer here to do it. The first step here is to establish proper beneficiary designations and update your will and estate plan.

Having this basic infrastructure in place will not only mitigate family disputes, divisions and conflict long after your passing, but ensure that you have a direct say in the financial fate of your children and grandchildren. You may even want to consider setting up a trust within your plan to ensure that a qualified professional is providing adequate financial service and making effective decisions about its use while your grandchildren are still young.

Remember, you can’t control the twists and turns life hands you, but you can always prepare for them. Having your financial affairs in order can bring you great comfort as you age, knowing that you’ve done everything you can to ensure they are well provided for. It will further warrant that even your great-great-grandchildren can benefit from the wealth whilst ensuring that your beneficiaries don’t end up with too much, which can result in the erosion of generational wealth.

Rethink at your retirement

When you become a grandparent, you may find your financial goals shifting slightly, particularly regarding your own retirement.

Perhaps you’d like to emigrate to the same country as your grandchildren or invest in a holiday house for everyone to enjoy together? Whatever you most desire during those golden years, it’s imperative to first consult an accredited fiduciary before embarking on significant investments and purchases.

Although spending time with your grandchildren can be joyful, too much of it can also become exhausting, particularly if you’re heavily relied upon to help with the childminding. This is why it’s absolutely essential to still have your own life filled with hobbies and interests, but most importantly, the resources to support yourself and your endeavours.

Alarmingly, research from the Insured Retirement Institute, cited by Investopedia, has found that as many as 45% of Baby Boomers surveyed have no retirement savings. A stitch in time saves nine. So wherever you are in your timeline, do what you can now to ensure that you leave this world debt-free and can provide for your own financial needs first before providing for others.

Work with a professional

Trying to do everything yourself will put you on a sure path to burnout, especially when it comes to managing your finances effectively.

Many find this aspect more challenging as they age, which is why it’s worth enlisting the support of a trusted advisor or wealth manager. A qualified professional can offer the right financial service, guiding you with your money choices when you may want to splurge on gifts, assist with daily expenses (nappies are expensive!) or even offer significant sums of money to help with school and university fees.

Unfortunately, too much monetary support can negatively affect a grandparent’s finances, because it’s not always easy to leave your emotions at the door when it comes to family. Another benefit of working with a seasoned expert is that they can also speak openly, objectively, and empathically about what is realistic and what’s not.

They will also help you devise a solid strategy where you can be generous enough without putting yourself in a compromised financial position. Not to mention offering further perspective on setting boundaries with your children on financial expectations they might have of you as a new grandparent.

The transition into grandparenthood provides the perfect opportunity to review and rebalance your portfolio. And if you haven’t yet considered it, offshore investing could also prove a worthwhile exercise to preserve and grow your wealth. Selecting suitable investments abroad and ensuring that they are housed correctly is crucial – I’m always happy to help here if you have any questions.

The bottom line…

When you become a grandparent, it’s likely that certain goals and ambitions may shift, which is completely normal. This new milestone provides the perfect opportunity to sit down and re-strategise your long-term retirement plans in a way that affords you the lifestyle you want during those golden years.

Preparing for the future doesn’t need to be stressful or intimidating. If you’re looking for objective financial service and advice, don’t hesitate to contact me here directly or connect on LinkedIn.

I am Giles Maynard. I provide individual investment and wealth management services for private clients and companies. I have been trusted by clients, large and small to manage, protect, and preserve their wealth. How can I help you with yours?