For people close to retirement who are feeling anxious about having sufficient funds, there’s some…
Do you want to have a satisfying and fulfilling retirement? Certainly, good health and enough money are crucial to making this happen. But equally important is what you do with yourself in retirement. A new report by Merrill Lynch shows that donating time and money in one’s later years is a major key to retirement happiness.
Tens of millions of Americans will be retiring over the next decade, and this mass exodus from the workforce will have significant effects on the economy and culture of the U.S. The report by Merrill Lynch suggests it will have another effect: increased giving of time and money to charities, nonprofits, and various causes.
Traditionally, most seniors have been concerned with leaving an inheritance to their descendants and charitable causes. But today’s retirees increasingly are intent on making a difference in the here and now, or “giving while living”. Facebook CEO Mark Zuckerberg and his wife may be the most high profile instance, with their recent announcement that they will “donate” 99% of their Facebook stock in their lifetimes, but the report indicates many others are intent on doing good in their lifetimes. The results of a survey showed most Americans over age 50 believe it’s better to be charitable than rich. About 85% of this group defined a successful retirement as “being generous,” while 15% said “being wealthy” was the measure of success.
Although having enough income in retirement to meet basic needs is undeniably important, most people as they grow older become more concerned with helping others and leaving a legacy, rather than acquiring material wealth. Volunteering and donating money gives retirees a sense of fulfillment as well as social connection to others that may be missing after one is no longer working. This is particularly true for social people who retired, possibly earlier than planned: volunteering with charities can add meaning and purpose to their new lives.
The top reason retirees cited for donating their time and money was gratitude. About 54% said gratitude was a top motivator for giving, and 48% said faith.
Financial advisors are encouraging prospective retirees to think about what they plan to do with their time. Those who encourage charitable endeavors may be helping their clients to have a more rewarding retirement.
“The biggest downfall that I have seen when people retire are those who are bored,” said Rich Wald, a Merrill Lynch financial adviser. “Those who started working with a charity before retirement, or at least have talked about what they will do charitably with their time in retirement, have a certain bounce in their voice that others don’t.”
Older Americans apparently are most fulfilled by donating both money and time. About 43% said they were most satisfied when both donating money and volunteering, compared with 32% for volunteering time and 26% for donating money, the Merrill Lynch survey found.
Today’s donors are more informed about the causes they choose to get involved with. The Merrill Lynch survey found 49% of baby boomers seek to understand how a charity uses its funding before they give, compared to 9% of earlier generations who felt this was important.
Eileen Heisman, chief executive of a large philanthropic organization, recommends retirees pick one charity they feel strongly connected to and believe is well run. They should get trained to volunteer with them “and then stick with it,” rather than spreading out one’s volunteering among multiple organizations, she said.
She recalled her own mother, who was a nurse, spending her retirement volunteering several times a week in hospital emergency rooms and other health facilities.