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Women Spread Too Thin

The sandwich generation is exploding -- like prosciutto bursting out of an overstuffed Italian hero.

Adult children who must care for their aging parents while raising their own kids -- appropriately dubbed the sandwich generation -- are 9 million strong and growing, according to the National Alliance for Caregiving ( ) in Bethesda, Md.

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But what the expression doesn't tell you is that it's mostly women who are getting squeezed.

About 73% of these double-duty caregivers are women, and the burden of caring for children and parents is preventing them from taking care of their retirement needs.

The average woman can expect to spend 17 years caring for a child and 18 years caring for an elderly parent, says the Family Caregiver Alliance ( ) in San Francisco. As a result, women tend to leave the workforce to meet these demands. Those who keep their jobs are turning down promotions and opting for flexible schedules so they have more freedom to care for family members.

The end result is reduced contributions to 401(k) and pension plans.

The cultural factors that place the care-giving burden disproportionately on women aren't likely to change soon, but there's a lot more women can do to make sure their golden years are indeed golden.

Women need to put their retirement needs first and save as much as possible during their working years. Here are some things they can do:

  • Invest more aggressively.

    Research shows that women tend to invest more conservatively than men, and that stifles returns in the long run.

    "Equity needs to be a bigger part of portfolio than most people think," says Deena Katz, a certified financial planner with Evensky Brown & Katz in Coral Gables, Fla.

    Returns for the S&P 500 index, a key stock market barometer, have averaged 28.5% annually for the past five years. Women need those returns to make up for time lost from leaving the workforce. So they should make sure that at least a portion of their retirement plans are in stocks rather than in more conservative bond and money market investments.

  • Make sure life insurance and disability insurance are in place.

    Many workers get disability coverage from their employers, but women who aren't working don't have this luxury. "Yet [the odds of] having a disability at the age of 42 are four times greater than death," says Diane Alecci, a financial consultant at Merrill Lynch in Paramus, N.J.

    For women struggling to care for elderly parents, long-term health care insurance should be considered. This insurance helps to pay for nursing home or in-house care. Premiums increase with age, so it probably isn't worth it for parents already over 60. But women should consider buying for themselves.

    "I have long-term care insurance because I don't want to [impose on] my kids," says Barbara Steinmetz, a certified financial planner and president of Steinmetz Financial Planning in Burlingame, Calif.

    Not everyone needs this insurance. Middle-income households will benefit most. Low-income families will rely on Medicare, and it's probably too costly for them anyway. Premiums can be as high as $1,000 per year. On the flip side, "Bill Gates does not need long-term health care insurance," notes Paula Kennedy, a senior manager in Ernst & Young's personal financial counseling group in Minneapolis and co-author of Ernst & Young's Financial Planning for Women.

  • Don't be afraid to seek help.

    Help is out there. Aside from the aforementioned alliances' sites, ( ) lists more than 90,000 child-care facilities and 70,000 elder-care facilities and provides information and tools to help caregivers understand the care-giving process.

  • Ask other family members to assume some responsibility.

    For instance, while calculating what you need to save for your child's college education, don't be afraid to include her or his earning power in the equation.

    College tuition costs an average of $30,000 a year at private institutions. "Yet there is this white-collar philosophy that I have to send my kids anywhere they want to go," says Ernst & Young's Kennedy. "But then people wait for kids to get out of college [before they] start saving for retirement." That could mean retirement saving doesn't begin until after age 50.

    Kids can take responsibility. They can take out loans, apply for scholarships or explore other options. Or -- heaven forbid -- they can work to help pay tuition costs.

    The same goes for elder parents' care. Nearly one in four households is taking care of a person aged 50 or older, according to the National Alliance for Caregiving. Yet children tend to feel the need to "give back to their parents" and foot the entire bill for their health care expenses. "Don't be afraid to use parents' assets to pay for their health care -- it's their money and that's what it's for," says Steinmetz.

    Many times, children don't know much about their parents' assets. They should make it a point to find out about wills, doctors, attorneys, insurance policies and beneficiary designations. In addition, adult children need know where they can find key documents.

    The government realizes that family care is a major trend and is starting to offer more tax breaks. Children who provide more than half the support for elderly parents can deduct all out-of-pocket medical costs on their own tax returns. That includes the cost of a live-in health care worker if a doctor's note states that the person cannot live alone.

    In addition, women should take advantage of flexible spending accounts, available from many employers, that allow them to put aside pretax dollars for medical expenses and day care costs.

    As women continue to have children later in life and parents are living longer, this sandwich generation just will keep growing. But with increased support from employers, other family members and the government, perhaps they will see other financial obligations take less of a bite out of their retirement.

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