Many people in retirement desire to give more of their time and financial resources to support charitable causes. This shift could be driven by factors including an increased capacity to volunteer, creating new social connections with like-minded individuals, a desire to make a positive impact on others, or having sufficient financial capacity beyond their lifestyle needs.
Studies have shown that retirees are some of the most generous givers. A 2015 report by AgeWave/Merrill Lynch referred to the significant giving potential of retirees over the next two decades as “America’s Longevity Bonus” – an estimated $8 trillion based on the value of their donations and time through the year 2035. Furthermore, the study also revealed some introspective results on motivation: seven in ten retirees said that giving was a major source of their happiness.
If charitable giving will be an important part of your retirement, here are four questions to ask yourself as you approach your giving in this next phase of life.
How can my ideal week in retirement be structured to include opportunities to give my time?
In retirement, you will have two resources to spend: time and money. How you spend your resources is a reflection of your values. If charitable giving is an important part of your life in retirement, there is a good chance it could impact your time. Consider not only the amount of time but how you will use your time to contribute and feel a sense of fulfillment in your efforts. Is there a regular interval that you desire to volunteer your time to a cause? How will other activities such as travel, and time with family fit into an ideal week?
How can my skills and experiences during my career be utilized to support the causes I care about?
Many retirees have accumulated a lifetime of skills and experiences. Once they retire, it may seem as if there is no avenue outside of the former workplace in which to pay it forward. Many charitable organizations are looking for ways to increase their effectiveness to support their mission but may be inhibited due to budgetary, personnel, or talent constraints. You could be in a unique situation as a donor with your professional background to help the organization better address a particular need. Even simply giving your unique feedback without a huge time commitment could prove to be beneficial to the cause.
What do I want my charitable giving to look like in retirement, beginning with the next 5 years?
Similar to typical spending trends in retirement, your charitable giving will likely go through phases based on a number of factors. You may desire to increase or decrease your giving once you begin your retirement and may later adjust as you monitor your financial resources, legacy plans, and areas of charitable interest.
The Women’s Institute at the Lily School of Philanthropy’s 2018 report “How Women and Men Give Around Retirement” revealed that during the five years leading up to and after retirement, the likelihood and amount of giving generally hold steady while spending in other areas declines. The survey found that the likelihood of giving increases by 5 percent from ages 60-70 while spending decreases by 22.7 percent. In practice, this could mean fewer work lunches and other spending needs that were part of your life during your career, while having a desire to increase your giving commitments.
How can I engage my family in my charitable giving goals during the legacy planning process?
You may experience in retirement that you think more often about your legacy. Some foundational questions could include “How do I want to be remembered?” and “What are the values that I hope my family will cherish after I am gone?” If charitable giving is important to you, you may find that sharing your charitable giving motives with your family to be a rewarding process. You could invite them to join you in supporting the causes you care about, such as volunteering together or making financial donations as a family.