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Grandparents’ giving stretches beyond holidays

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Mary Hopp has firm beliefs about her role as a gift-giver to her seven grandchildren.

Money deposited into their 529 savings plans for college? Absolutely, on every birthday. Money frittered away buying them trinkets, gadgets or (heaven forbid) cars? Not on your life. Every Christmas, the grandchildren — ranging in age from 5 to 16 — receive books.

“I don’t think I should be looked at as a bank,” said Hopp, 68, who lives in El Dorado Hills, Calif.

Her contributions to the so-called grandparent economy are carefully considered yet generous — a prime example of how America’s 70 million grandparents divvied up the $52 billion they spent on their grandkids in 2009, according to a study that was commissioned by Grandparents.com.

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With that kind of spending power, even in the depths of the recession, grandparents are clearly a key force driving the economy. For them, the giving season neither begins nor ends with the holidays.

Some, hard hit by the tough economy themselves, would love to have the luxury of giving more than they do. But the fact remains that it’s the rare grandparent who won’t sacrifice for the grandchildren.

As AARP California’s Christina Clem said: “Grandparents consistently put their children and grandchildren before themselves.”

They not only buy gifts. They also contribute almost $17 billion a year to the grandkids’ education, in the form of tuition, college savings plans, after-school programs, textbooks and supplies. They spend $10 billion buying clothes for the grandchildren — and almost $6 billion on toys.

And because being with the grandkids tops many grandparents’ agenda, they pay billions for travel, either with the grandkids or for grandkids to fly out to see them.

Phil McPeek, 67, a Rancho Cordova, Calif., sales executive, estimates that he and his wife already spend about $1,000 a year on their sole grandchild, 2-year-old Allyson. As the years pass, they intend to shell out plane fare to fly her up from San Diego, where she lives with her parents.

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“And we’ll take her to Colorado to our cabin there,” said McPeek, “depending on if she’s a good little human being who can dress herself and speak our language.”

Mary Strong sends $50 savings bonds now to contribute toward her great-grandchildren’s education. But when her four grandkids were young, she and her husband regularly bolstered the family gift-giving bonanza.

“Our kids couldn’t afford bicycles and things like that,” said Strong, 81, who lives in a south Sacramento senior facility. “So we’d buy the bicycles and special toys the grandkids wanted. Their parents were just starting out, so we did the buffeting up of Christmas.”

Even younger grandparents — the 54% who haven’t yet reached age 65 — tend to be better established in their lives than their offspring: more settled in their careers, with a higher average net worth and lower monthly mortgage payment.

Fifty-five percent of grandparents have paid off their mortgages, according to the Census Bureau’s American Community Survey.

Even when money’s tight, said Grandparents.com Editor in Chief Gary Drevitch: “Grandparents resist cutting back on the grandkids. It’s not necessarily people spending a lot. It may be $30 gifts, but they don’t want to give that up.”

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Perhaps remembering how hard it is to start out in life, or perhaps because they’re unable to limit themselves, some grandparents can’t help giving too much. But some grandparents have to be told that their generosity that doesn’t always inspire reciprocal treatment.

“Our financial experts frequently remind grandparents to make funding their retirement their first priority,” Drevitch said. “Someone will always loan your grandchildren money for college, and no one will loan you money for retirement.”

Trevor Hammond has seen that situation too often as senior vice president at Eskaton, which provides housing for seniors in California.

“If you have sufficient money, there’s a moral obligation to help,” he said. “But you’ve got to be really careful, too. You have to be able to support yourself.”

But for most grandparents, the giving of gifts is a straightforward business — an expression not only of love but also of faith in the future that the grandchildren represent.

Hopp’s daughter, Julie Vinson, thinks all the Hopp grandchildren are tickled with their grandparents’ no-nonsense gifts.

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“They know they’re not getting anything frivolous,” said Vinson, a hotel catering manager and mother of 10-year-old Hannah. “That’s what they love about my mom and dad. My parents give of their time quite a bit. Most definitely. That’s where they give the most.”

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