Ask an Advisor: Being a Woman Caught in the Sandwich Generation

Rose Price, CFP® AIF® Finance

Many women find themselves part of the generation, “sandwiched” between caring for their aging parents and young or even grown children, often providing support while holding down full-time jobs. This role can challenging, especially when it comes to finances.

With the rising cost of living in the DC-metro area, trying to meet day-to-day expenses while saving for retirement (and possibly college) can be challenging. When you add the financial challenges of caring for aging parents and supporting adult children, the financial burden can seem overwhelming. Below is a list of three things anyone caught in the sandwich generation can do to reduce some of the uncertainty and help ease the burden.

1. Talk With Your Family About Finances

Even though it may be difficult to talk with your parents and children about financial realities, try to do so early on. If you wait until a medical or financial crisis forces you to act, you may not have the time or flexibility you need to make sound financial decisions.

Talking with Your Parents: Try to get a clear view of your parents’ finances, including insurance, retirement savings, sources of income, and expenses. That way you can better understand what they can afford and where you may need to fill in any gaps. The goal is to get everyone thinking about the big picture and working to identify changes that could be made to reduce some of the risk.

If you can, sit down with your parents and discuss their essential living costs (expenses such as housing, food, insurance, and transportation) as well as their discretionary costs (expenses such as entertainment and travel). Compare essential expenses to steady sources of income, such as Social Security or pensions/annuity income (if they have any) then discuss the amount of money they are withdrawing from their retirement savings, investment accounts, or other funding sources and how long that money is likely to last.

Also, check into their health care plans. Try to identify sources that will pay for future health care expenses. Get details on their health and long-term care insurance, as well as any other available resources. Make sure they have a health care proxy and a living will in place.

Talking with Your Children: The discussion with your children may be similar in many ways, depending on their age. If your adult children are depending on you to fund their expenses or are living with you rent free, you need to identify where they are falling short and work with them to come up with a plan for them to become financially independent.

If you children are college age, discuss with them your ability to fund their education. Your instinct may be to try to protect your children from financial realities, but it is important that they understand that college is not free, and that they may be expected to fund part (or all) of the cost.   There are many options for reducing the out of pocket expenses of college including scholarships, local college, and work-study programs.  Remember, your children can take out loans to fund their education—you cannot take out loans to fund your retirement.

2. Prioritize Saving

If you are in the sandwich generation it’s important to save as much as possible. It is hard to predict future expenses and having a fully funded emergency fund, and being on track with your retirement savings can go a long way in providing for your financial security. This is especially true if you have to take time off from work (and lose income) to care for parents.

Put Your Retirement First: Contribute as much as possible to your workplace retirement plan. At the very least, make sure you contribute up to any company match so you’re not leaving ‘free money’ from your employer on the table. It is also important to avoid tapping into your retirement savings prematurely through loans or early withdrawals. Dipping into your retirement funds early removes the potential for tax-deferred growth and compounding, which can leave a serious dent in your retirement savings. 

Prepare for College Costs: If you aren’t already saving for your children’s college, you may want to consider starting. There are several tax-advantaged college savings accounts available. One is a 529 college savings plan account, which offers tax-deferred growth and federal income tax-free withdrawals for qualified higher education expenses. Many states offer a state tax deduction for annual contributions. Research 529 plans in your state to find out your options.

Save on Health Care: Health Savings Account’s (HSA) and Flexible Spending Account’s (FSA) are two popular savings accounts that allow you to save for healthcare expenses pre-tax and withdraw principal and earnings free from federal taxes for qualified medical expenses. Contact your employer’s benefits provider to find out if you are eligible to save in an FSA or HSA.

3. Protect Yourself and Your Family

Make sure you and your family have adequate insurance coverage to reduce the likelihood of an unexpected large medical expense derailing your financial security. 

  • Health: You cannot depend on Medicare to cover all of your parent’s medical expenses. For example, most dental care is not covered by Medicare, and can be pricey.
  • Long Term Care: Medicare also does not cover long-term care. Do you and your parents need long-term care insurance? The answer depends on your age, the cost of coverage, how long you might need coverage, and the types of benefits you want. So carve out the time to weigh your options.
  • Life & Disability: With the needs of multiple generations on your shoulders, protecting your family from the risk of your disability or death may be more important than ever. Disability and life insurance can help make sure that your loved ones are cared for in the event that you are unable to work.

The reality is that managing the competing financial priorities of your parents, your children, and yourself can be stressful. So take control by discussing your families options, saving now for future expenses, and making sure you have the safety nets your family needs in place. A good financial advisor should be able to guide your family through these discussions and help you identify and potential shortfalls.

You or your family may have to adjust their expectations—from when you stop working, to where your kids go to college to how your aging parents spend their retirement. In the end, this is what families should do—work together to solve problems. Remember you do not have to handle this on your own.


Rose Price, CFP® AIF® is a partner at VLP Financial Advisors. She believes that strategic planning is the key to creating, protecting, and growing wealth. Rose offers a complimentary initial consultation to anyone interested in investment advice and/or creating a financial plan.

Want to learn more?

Visit: www.vlpfa.com or submit your question for an Advisor to info@vlpfa.com.

VLP Financial Advisors

(703) 356-4360
8391 Old Courthouse Rd., Suite 203
Vienna, VA 22182

Rose Price is a Registered Representative of and offers Securities and Advisory Services through Cetera Advisor Networks LLC, member FINRA/SIPC. Cetera is under separate ownership from any other named entity.