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Seniors give back

Today's retirees make lasting contributions that impact the world

Created date

July 8th, 2016
Red Cross volunteer Terry Lewis talks with an evacuee at the Red Cross shelter in Bound Brook, N.J., after the area was struck by a powerful storm.

Red Cross volunteer Terry Lewis talks with an evacuee at the Red Cross shelter in Bound Brook, N.J., after the area was struck by a powerful storm.

How do you define success in retirement—being wealthy or being generous? According to a study by Merrill Lynch and Age Wave, a research and communications firm specializing in aging, 85% of respondents believe that generosity is the benchmark of a successful retirement. 

When asked to make a donation, are you motivated by guilt or gratitude? Most people said that they give because they are grateful for what they had in their lives. In fact, gratitude was 18 times more popular than guilt.   

When it comes to giving, what makes you feel better—donating money or donating time? Twenty-six percent of respondents said money. Thirty-two percent said time. Forty-three percent said giving both time and money was the most fulfilling.  

“Before I retired, I just wrote checks to charities. I didn’t have time for anything else,” said one of the study’s participants. “In retirement, I give of my money, my time, and myself. Now I can really feel the difference I’m making.”

The study

“Giving in Retirement: America’s Longevity Bonus” is based on a survey of 3,600 respondents from all income levels, generations, and genders. Researchers were interested in how different generations view philanthropy in retirement. They also wanted to explore the benefits of giving back—to individuals, their families, and society at large.

That retirees lead the nation in giving should not surprise readers of the Tribune. Although current retirees account for less than a third (31%) of the U.S. population (age 25-plus), they contribute 42% of the money given to charity and nearly half (45%) of volunteer hours. 

More than other generations, retirees reported the desire to make an impact, stay connected, and express their beliefs as the motivation behind their giving. Making a difference in the lives of others is, by far, the top motivational factor for retirees when it comes to making a financial contribution. It was five times more important to them than receiving a tax write-off. 

“We’re seeing that retirement unleashes new opportunities to give that can positively impact the world,” says Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch. “Today’s retirees are in a position to make significant, lasting contributions and define their legacy. We’re going to see older adults contributing to society in new and meaningful ways.”

Giving boom

Based on this study, researchers believe the country will see an unprecedented surge of giving over the next 20 years. A combination of factors, including increased longevity and the massive number of Baby Boomers moving into their retirement years, will create what’s being called a “longevity bonus” with an estimated value of $8 trillion.

That $8 trillion value is a projection based on the expected $6.6 trillion in financial contributions combined with the monetary value of the anticipated 58 billion hours of volunteer time. 

“Retiring boomers are a new and growing force in the giving space that can’t be ignored,” says Lorna Sabbia, head of Retirement and Personal Wealth Solutions for Bank of America Merrill Lynch. “The study found that retirees not only give more, but they believe they are able to give better by being more focused, hands-on, and impact-oriented.”

Questioning authority

One of the defining characteristics of the Baby Boomer generation is their propensity to question authority—from college professors to government officials to the medical establishment, so it’s unlikely they will change course and suddenly accept the status quo as they move into retirement. Already, this generation is shaking up the traditional model of giving. They are significantly more interested in researching a charity before making a donation. They want to know how an organization spends its resources. They also prefer to specify how they want their contributions to be used. 

While there have been many dire predictions of how the impending wave of Boomers reaching retirement age will tax the nation’s medical and support services, this study offers the positive side of the equation. However, just as medical schools are being encouraged to train more geriatricians and communities are being encouraged to establish social services to assist an aging population, charitable organizations will also need to prepare if they wish to reap the rewards of the “giving boom.” 

“We have a unique opportunity to harness the wealth of talents, skills, and experiences of the Boomer generation as they enter retirement and seek to make a difference,” says Ken Dychtwald, Ph.D., founder and CEO of Age Wave. “Rather than being a drain on our nation’s resources, the ‘age wave’ could be part of the solution to many of our country’s biggest challenges.”