Baby Boomers: Spoil the Grandkids, Spare the Lecture
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By Linda Stern,
April 16, 2012

The generation that invented "helicopter parenting" is moving into its grandparenting years with a wad of cash and strong ideas about how their precious posterity should live, so get ready for Granny and Grandpa Baby Boomer to shake things up.

Already, today's first-time grandparents are the youngest ever, with an average age of 47, according to an AARP survey. Boomers have the highest median household income of any age group, according to the U.S. Census; by some accounts they control as much as 70 percent of American net worth and stand to inherit another $8 trillion or more.

What could be more American boomer-esque than spending that money on the grandchildren, indulging them and exerting influence along the way? Roughly 36 percent of the grandparents surveyed by AARP said "spoiling (grand)children by buying them too much" was a part of a grandparent's financial role.

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And it's fun. Ask George Marotta, who is not a baby boomer. The 85-year-old Palo Alto patriarch has turned helping his 10 grandchildren into a hobby that has paid off for multiple generations. He and his wife started in the mid-1980s, and over the years have plowed cash into bank accounts, 529 plans and Roth IRAs for all of the grandchildren.

Their total investment of just under $700,000 into 529 college savings plans has already put five grandchildren through college; four more are now in college and one is still in high school. And there's $708,335 left to fund medical school for one, divinity school for another, and graduate school and continuing education for all.

"We had more than we needed for ourselves, and so we thought we would help the grandchildren," Marotta said, noting that he and his wife became financial planners in Palo Alto in the mid-1980s, just around the time the dot-com boom was taking off. Widowed 10 years ago, Marotta has since remarried and is now a research fellow at Stanford University's Hoover Institute. "I recently sent an email to my 10 grandchildren, saying, 'Don't worry about your career; do something you really would like to do. Experiment if you want," said Marotta. "We've got you covered." David John Marotta, one of George's three sons, said: "He has been my mentor."

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So how do you do that? Even if you don't have Silicon Valley/Marotta wealth, you can make a difference in the lives of your grandchildren, and do it without hurting your relationship with your kids. Here are a few ideas, from the real experts -- folks like Marotta who are financial advisers as well as grandparents.

* Ask for permission. It may sound funny to ask your child if it's okay before you start throwing money at your grandchild, but it is a key step. "Some parents don't want their children to get a lot of toys and things; it's important that you honor their view," says Janet Briaud, a fee-only financial planner (and grandmother) in College Station, Texas.

* Give experiences and memories. One new trend that baby boomer grandparents are likely to latch on to are the multi-generation family vacations. "That's become kind of a popular thing to do," observes Robert Carlson, a northern Virginia financial adviser and editor of "Bob Carlson's Retirement Watch" newsletter.