Planning ahead for everyday expenses in retirement—from weekly groceries to monthly bills—is something in which many soon-to-be retirees are fairly well versed. In order to maintain a comparable lifestyle to what you’ve lived up until retirement, you know approximately how much money you’ll need each year. But if you haven’t considered how much you might give to charitable causes in your post-work years, perhaps it’s time to include that in the equation.
Retirees are giving in unprecedented numbers — both time and money.
Retirees are more likely to give to charities and causes they care about than any other age group, according to a survey recently released by Merrill Lynch and Age Wave titled “Giving in Retirement: America’s Longevity Bonus.” Retirees make up 31% of adults over age 25 who were surveyed, and they contribute 42% of charitable donations and 45% of volunteer hours.
“How retirees give—through financial contributions or by volunteering their time and skills—will have important implications for how our nation’s challenges and needs will be met in the years ahead,” the report states.
The pair of companies predict that volunteer time will hit 58 billion hours over the next 20 years among retirees, accounting for about $1.4 trillion in services. Add this figure to $6.6 trillion in philanthropic giving, and the total value of retirees’ collective giving soars to $8 trillion, according to the report.
Why is retirement such a popular time to give back, you might ask, and why does the baby boomer generation’s giving power matter? For one, retirees have the most time, savings and skills to contribute to charities and philanthropic cause. Beyond that, there are three main factors that will prompt a surge in giving among retirees in coming years, which combined make for the potential for tremendous growth in financial giving.
Massive Boomer Generation Makes the Dollar Amount Bigger than Ever
With more than 70 million baby boomers set to enter retirement in the coming years, they’re poised to change the giving landscape. Compared to their parents’ generation, boomers call themselves more strategic, hands-on and demanding with their money and time, according to the report. They also indicate a desire to employ their skills and talents developed throughout their lifetime when volunteering in retirement.
More Years in Retirement — More Time to Volunteer
American’s are living longer than ever. In fact, life expectancy for males is about 76 years, while for women it’s 81 years. As such, they’ll spend a significant portion of their lives in retirement—for some, 15 years or more.
This means retirees will be giving their time and money for a much greater period of time. Women were also deemed the most generous gender, so those five years of life expected over men could mean greater giving potential.
High Rates of Giving
About seven out of every 10 retirees surveyed noted that being generous is a crucial source of happiness in their retirement years. By contrast, retirees who don’t make donations or give back are more likely to say they don’t have a strong sense of purpose or high self-esteem. As such, more and more retirees are dipping into their pocketbooks or committing their time to causes they’re passionate about, driving up the rates of giving.
Can You Afford to Give or Volunteer? What is the Impact on Your Retirement Plan?
No matter if you are giving big or small amounts or even your time, any charitable effort should be considered as part of your overall retirement plan.
The NewRetirement Retirement Calculator can help you make better decisions about volunteering and charitable giving in retirement. See what happens to your plan if you plan a large donation for a specific year. Add small donations into your monthly budgets. Can you afford to volunteer? Or do you need an income?
