Today’s Baby Boomer grandparents are a microcosm of mature consumer lifestyles. They provide care for aging parents and young children, equating to billions of dollars in savings. They pay for education, insurance and daily expenses, sacrificing their own secure retirement to do so. And they’re helping to fund these younger and older family members by working longer than any previous generation of older adults.
With the number of grans and grandads in the US set to rise to 80 million by 2020 – representing one in three adults – a growing number of Boomers are set to take on new roles both within their families and as consumers. Lori Bitter, president and senior strategist at The Business of Aging, presents findings from her new book, The Grandparent Economy, that reveal how this generation of grandparents is changing spending patterns, keeping up with new technology, and sparking a return to multi-generational households.
The life stage
Grandparenting is the most emotional and positive life stage for mature consumers, and the most financially lucrative for businesses. The shaky economy and aging Boomer generation have created an unprecedented consumer market. These shoppers dominate 119 out of the 123 packaged good categories and are outspending younger consumers two to one online. Since 2000, grandparent spending has outpaced general consumer spending at an average rate of approximately 8% annually.
Boomers were born into 20 years of renewed prosperity in the US. Post-war optimism and high fertility rates created a huge generation of young people. The suburbs grew to house them, school districts expanded to educate them, and companies exploded to meet their ‘modern’ needs – baby food, disposable diapers, baby furniture. Meanwhile, language changed to describe them – teenagers, young adults, coeds – as they created life stages not experienced by previous generations.
For the first-time grandparent, the birth of this grandchild is their first brush with their own mortality. It is the first time they see the life of their family continuing after they pass away
Boomers then went on to parent differently. They were very involved in their children’s schools and activities; the term ‘helicopter parent’ was coined for this generation. Their meddling continued into college and career, and they are now just as involved with their grandchildren.
The average age of becoming a grandma or grandpa is rising from 48 to almost 50 as young women delay marriage and childbearing for education and work. For the first-time grandparent, the birth of this grandchild is their first brush with their own mortality. It is the first time they see the life of their family continuing after they pass away. It is an emotionally powerful moment that is frequently followed by a powerful desire to spend.
Newborn grandkids can spark Boomer spending sprees
Sandor Weisz, Creative Commons (2009) ©
The term ‘sandwich generation’ is used to describe the phenomenon of middle-aged people raising children while also caring for elderly loved ones. During the recession and in its aftermath, the squeeze on the Boomer generation of grandparents tightened. Seniors hoping to cash in their homes to fund their long-term care could not move. Young people with student debts could not find jobs and returned home, or required the help of their parents with expenses while they tried to find employment. Boomers stepped in to help.
More than half of grandparents report providing financial assistance to their adult children as a result of the downturn. Emergency help following a job loss topped the list of reasons, with Boomers also contributing to educational expenses, housing, and basic costs of living. This is before direct spending on their grandchildren.
According to a Pew Charitable Trust report, older Boomers lost 28% of their median net worth while younger Boomers lost more than 25%, resulting in many falling back on savings or on a spouse’s income. Those poised for retirement found the needs of their families would require them to keep working. As a result, US Boomers have been forced to admit that their children and grandchildren might not experience ‘the American Dream’ and the promise of a better life.
Squeezed Boomers have been left to take care of three generations
Saint Francis Academy, Creative Commons (2015) ©
Hip, young and smart
Tamar Kasriel, managing director of futures consultancy Futureal, suggests that there’s a growing sense of agelessness nowadays; people are no longer acting their age, and there is increasing confusion about what behaviour is appropriate for different age groups. Today’s grandparents are more youthful, vital and active than ever before. They’re spending thousands on rock concerts, hundreds on jeans, stocking up on the best anti-aging formulas, while amassing a shoe collection that Carrie Bradshaw would envy.
Yet searching for grandparents on Google stills produce photos of elderly people in sedentary environments or cartoon caricatures of couples with grey buns, sagging bellies and canes. These depictions are far from the truth; in reality, only 20% of grandparents are over 75. Stereotypes like this keep companies and organisations from considering the grandparent life stage as a viable target consumer.
They are spending thousands on rock concerts, hundreds on jeans, stocking up on the best anti-aging formulas and scents, while amassing a shoe closet that Carrie Bradshaw would envy
Today’s grandparents are highly educated and 75% are still working. These Boomers are at the peak of their career and account for 47% of the nation’s total household income. One interesting artefact of longer working lives is the loss of grandparents as a source of free (or inexpensive) day care for grandchildren while parents go off to work.
Beyond their youthful tastes and economic power, this is the first generation of grandparents to signal a shift in the racial and ethnic diversity of the country. The Baby Boomers were the first fully acculturated generation of Asians and Hispanics in the US; approximately 20% of today’s grandparents are Asian, Hispanic or African American. What’s more, Boomers also mark the first openly gay and lesbian population of ageing adults. The climate of acceptance – plus the availability of partner benefits and marriage – has added to the diversity of families and relationships in the US.
Today’s grandparents are splashing out on the high street
Thomas Hawk, Creative Commons (2013) ©
Tech proliferation is one of the biggest cultural markers dividing today’s grandparents from previous generations. From social media to smart devices, Boomers have used digital tech in their work lives and, with advances in user experience, have embraced them in their personal lives as well. In a study on digital technology conducted by The Business of Aging, Boomer grandparents expressed how social media is highly useful for staying in touch with their grandchildren and keeping up with their day-to-day lives. Grandmothers reported learning to text on smartphones to communicate with their older grandchildren, while FaceTime and Skype were cited as excellent ways to connect when grandparenting over long distances.
Grans and grandads are also funding tech for their grandkids. They reported purchasing phones, computers, tablets, gaming systems, and music systems, citing both education and connection as their rationale. The grandparents from the study were also willing to pay for more ‘bells and whistles’ than the child’s parents, with younger grandparents believing that technology gives children an advantage in school.
While today’s grandparents are willing to spend on movies, games, subscriptions, and more in the online world, they exhibit anxiety about the sedentary nature of these activities. They also complain of too much screen time on holidays and at family events by adult children and grandchildren, seeking guidance on how to enhance a grandchild’s health and wellbeing with relevant activities.
Baby Boomers have no fear of screens
Re:publica, Creative Commons (2014) ©
Back to the future household
Multi-generational households are becoming more commonplace, partly due to increasing diversity and cultural expectations of extended family all living under one roof. Yet more often than not, these ‘3G’ homes are a product of the economic downturn. Census data from 2010 indicated that there were 4.5 million grandparent-led households with at least one grandchild present across the US.
Generations United, an advocacy and resource organisation for ‘grandfamilies’, reports that 7.8 million children are living with grandparents or other relatives, with a single parent present in 49% of these households. However, 34% had neither parent, equating to roughly 2.7 million grandparents raising young children on their own. Kinship care – children raised by grandparents – is alarming at the lower end of the socioeconomic spectrum, where access to legal assistance, services and education can exacerbate already fragile household finances.
There are a further 2.7 million households where a grandparent is living with a family. This may be due to finances, healthcare concerns, care arrangements for grandchildren, or cultural expectations. Experts believe reports of intergenerational living are low, and there may be up to 10 million children living in a 3G household.
2.7 million grandparents in the US are raising grandkids on their own
DVIDSHUB, Creative Commons (2008) ©
Insights and opportunities
With increased longevity, Boomers will spend almost half of their adult lives in the grandparenting life stage. Looking to stick around for their grandchildren as long as possible, they’re placing greater importance on health and wellness. They’re also embracing technology and learning new things to keep up with their grandkids’ lives. The overarching aim is to make memories with their grandchildren while they’re still alive.
The idea of leaving a legacy is strong with this generation of grandparents. In the past, this meant financial gifts, like property, money and other tangible assets, yet Boomers appear to be placing greater emphasis on a transfer of values and experiences. This is manifesting in the desire to share hobbies, do things together as a family and impart a sense of political, environmental or community activism.
A study conducted by MetLife Mature Market Institute – 'Grandparents Investing in Grandchildren' – found that 52% of grandparents wanted their grandchildren to think that they ’provided for [their] family even in tough times’, while 47% wanted to leave a legacy that ‘taught [their] grandchildren to make a positive difference in the lives of others’.
Somehow, we have to get older people back close to growing children if we are to restore a sense of community, a knowledge of the past, and a sense of the futureMargaret Mead, cultural anthropologist
Adults at midlife and beyond tend to experience a powerful desire to nurture the next generation. According to a Harvard Medical School study, older adults who follow this natural impulse to connect with and guide younger generations are three times more likely to be happy in later life than their peers who do not. “Biology flows downhill,” says Harvard psychiatrist George Vaillant, describing this natural drive to contribute to the growth of the family tree.
Many years ago, when Boomers were still children, cultural anthropologist Margaret Mead had this prescription about older adults in the lives of children: “Somehow, we have to get older people back close to growing children if we are to restore a sense of community, a knowledge of the past, and a sense of the future. Nobody has ever before asked the nuclear family to live all by itself in a box the way we do – with no relatives, no support; we've put [nuclear families] in an impossible situation.”
Lori Bitter was raised by her grandparents, so long before she read her first report on generational insights, she understood the fundamental differences between parents’ and grandparents’ generations. She was previously president of JWT’s Boomer division and is now a consultant who specialises in engaging with mature consumers at The Business of Aging. Buy her latest book, The Grandparent Economy, here.