If you have recently become a grandparent, congratulations! If you are still waiting, don’t give up hope.
It is now normal for many not to become grandparents until their mid-60s. Several of our friends have waited so long that they joke about their “four-legged grandchildren.”
With birth rates declining, this new, long-awaited generation receives significantly more attention than grandchildren did in the past. I noticed last Halloween that many kids weren’t just trick-or-treating with their parents, but they were also being watched and fawned over by several other adult family members.
The high cost of raising children and the scarcity of available childcare also mean that adult children are relying on their parents more than ever for help once the grandkids arrive. Before committing to providing childcare or making any other big moves, consider the following tips to help you examine your options strategically and objectively.
First, before you agree to anything, take a step back and ask yourself how you planned to spend your retirement.
If you have always dreamed of having young children underfoot in your home every day, now that you have the time and resources to enjoy it, that is great. However, if you imagine traveling, spending more time on your hobbies, or simply sitting on the porch with your spouse, you should be honest about your own needs before setting firm boundaries with your kids about your level of involvement.
I have seen seniors who did not think this through at the beginning end up “stuck” providing full-time care, with no breaks, even for a vacation. One couple we know is unable to attend an exercise class they both enjoy at the same time because someone always has to be home with their grandson. Over time, and understandably, they started to feel resentful.
What if your kids ask you to provide childcare?
Will you provide childcare, and should you accept payment?
According to a 2025 Care.com survey, the average weekly cost of a nanny is $827 in 2025. The average weekly cost of a daycare center is $343. This was a national survey, so costs in California are probably even higher. Parents report spending 22% of their household income on childcare, and over a third claim they rely on friends and family for assistance.
If you plan to help, establish clear boundaries regarding the days and times you are willing to provide care. (Sorry, I can’t help you with that part.) Then, you must consider the uncomfortable issue of whether you should be compensated. Having them pay you might benefit both of you financially.
If your adult child is working or looking for work and pays you for childcare, they may qualify for the Child and Dependent Care Tax Credit on their tax return. Instead of paying a stranger, they can pay you and take the credit.
You will need to declare what they pay you as income on your tax return. However, if your other income is low, for example, if you are drawing only Social Security, your income tax on that added amount may be minimal or even zero. You will need to pay Social Security Taxes, but those payments may increase your monthly Social Security benefits later, since you are adding to your lifetime earnings record.
Here is a simplified example:
In 2025, parents pay Grandpa $3,000 for care provided at his home for one child. They can claim a $1,500 tax credit — a dollar-for-dollar reduction in taxes owed. Grandpa deducts $1,000 in legitimate childcare-related expenses that he would pay out of pocket anyway (like mileage or supplies). He pays about $283 in self-employment tax on the remaining income, so Grandpa nets $2,717, before expenses. It costs the parents only $1,500. You can double the numbers if there are two or more children.
Be sure to consult your tax professional and review IRS Publication 503, “Child and Dependent Care Expenses,” before deciding if this will benefit your family.
If your child wants to pay you but you’re not comfortable accepting the money, consider setting it aside in a separate account for future grandchild expenses, such as camp (so you can take that vacation) or in a savings account for them. That way, the money still helps the family, and you maintain control over how it’s used.
Our kids want to move. Should we move as well?
This one is especially tough.
Your kids may move for work or to a more affordable area, and suddenly, you either need to move or lose the ability to see your grandchildren whenever you want.
For this issue, consider two key questions: Is this move likely to be permanent, and will it also benefit you financially?
Uprooting your life by selling a home, leaving your friends behind, and changing doctors is a big deal at any age. However, as we age, it becomes increasingly difficult to start over. You want to avoid making a move only to have to make another one in a few years.
You should also take the time to visit and research the new area. I have had clients who have moved to other parts of the country, believing it would be friendlier or less stressful, only to regret it because they missed our weather, culture, and their life before the move. Additionally, as the grandkids become teenagers, you will likely spend less time with them, so be sure it is a place you will enjoy living.
If your child is relocating to a lower-cost area, moving with them might be a smart financial move. Downsizing could free up equity from your current home. And if you’re staying in California, some counties allow you to transfer your property tax basis, so you don’t lose your low property tax rate.
If you’ve lived in your home for at least two of the last five years, you can usually sell and exclude up to $250,000 of gain from the sale from taxes if you’re single, or $500,000 if married. You no longer have to trade up, and it is no longer a once-in-a-lifetime exclusion.
If the move is driven by affordability, you may not need to move at all. Some grandparents choose to help their children buy a home nearby instead. My neighbors gifted their two divorced sons enough for a down payment on a house on the same street. Their sons now share an affordable mortgage. The grandparents have their home back, and they get to see their grandchildren on a daily basis.
Helping with childcare or contributing toward housing can be a fantastic way to support your family, provided you establish appropriate boundaries. The website zerotothree.org has excellent advice for new grandparents. In many states, grandparents have legal rights related to visitation, custody, and guardianship. You can explore these through the AARP legal pages or at grandfamilies.org. The idea is to find solutions that are win-win-win for you, your kids, and your grandkids.
Michelle C. Herting is a CPA, accredited in business valuations, and an accredited estate planner specializing in succession planning and estate, gift, and trust taxes.
