Liberty Reverse Mortgage and Sacramento State University worked together to compile the second annual Grandparent’s Cost Index® to examine the amount of money Grandparents spend on their grandchildren. Among the 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.
“Grandparents who have mortgages spend a lot less than those who do not,” explains Professor Dennis H. Tootelian, Ph.D. “The economic impact of Grandparents’ spending is huge, and it continues to grow as the spending power of these Grandparents increases.” This study shows that Grandparents often times will borrow and take out loans 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 study, additional spending could reach up to $56.2 billion. If you are looking for more detailed information check out the executive summary below