Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
Updated August 3, 2026. Quick answer: the money you take out of a retirement account in your sixties to support a grandchild is the most expensive money in your life, and it is the hardest to replace. This is the oxygen-mask page: not because your needs come before the child’s, but because a grandparent who runs out of money in their eighties becomes something the child has to solve.
Why this money costs more than it looks
- It is taxable when it comes out of a traditional account, so a $20,000 (2026) need can require noticeably more than $20,000 of withdrawal.
- The extra income can raise other costs — the Medicare premium surcharge two years later, and how much of your Social Security benefit is taxable.
- It cannot be put back. Contribution limits apply, and earned income is required to contribute at all. For a retired grandparent that route is usually closed.
- You have fewer years to recover than someone drawing down at 45.
The order that protects both of you
Nothing here says do not help. It says change the order:
- Claim what the child is entitled to first. Benefits on your record and the tax credits are not charity and not a loan — they are the child’s, and for 2026 the EITC alone can be worth up to $4,427 with one qualifying child.
- Use taxable savings before tax-deferred accounts where you have them.
- Keep helping at a level you could sustain for ten years, rather than solving one year at a crisis level and having nothing left for the next nine.
- Never borrow against your home for routine expenses. Housing is the last thing that should be at risk, and it is the thing the child needs most.
The credit most grandparents wrongly believe they are too old to claim
The college question
Your grandchild can borrow for college. You can’t borrow for retirement.
College is where good intentions do the most damage, because the amounts are large and the deadline feels fixed. It is worth saying plainly: the child can borrow for college and you cannot borrow for your retirement. A grandparent who arrives at 85 with no assets has not protected the grandchild — they have transferred the problem forward by twenty years, to the same person, at a worse moment.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. The matching service is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here. You stay on this page.
What happens when you press the button
It requests contact details and phone verification by text. Nothing loads and nothing reaches Kapitalwise until you press the button. Submitting the form does not guarantee an adviser or a match.
Honest gaps
Whether a particular withdrawal is the right decision depends on your other income, your tax bracket and how long the support will run — none of which a page can know. What a page can do is make sure the benefits check happens before the withdrawal, not after.
Back to the money guide.
General information drawn from the Internal Revenue Code, Treasury regulations and IRS publications, not legal or tax advice. Thresholds and dollar figures are adjusted regularly and several of the rules here turn on facts this page cannot see, so check the current year before you act on a number.