How can I be generous to charities without jeopardising my retirement?
How are you going to get the best, most fulfilling life possible with the money you have once you retire?
Study after study has shown that retirees who spend their time and money on experiences are much happier than those who just buy stuff. And charitable giving can be a particularly meaningful way to keep yourself active and put your assets to good use.
Just as long as you don’t overdo it.
If you’re feeling an increased desire to give back now that you’ve retired, here are some tips on balancing your good intentions with what’s best for you and your family.
1. Do your homework
If you’re giving money to a charity make sure it is run well. You should understand where your money is really going – or a sizeable slice of your donation can end up covering administration.
You may be happy with your money helping a larger organization to pay its bills and employees but should you want your money to have a more immediate impact on those in need, consider giving to smaller organizations in your community.
Your favourite non-profit or charitable organizations need money but they also need manpower.
If you’re thinking about working part time in retirement and a salary isn’t really important to you, schedule regular volunteer hours instead. You’ll get all the same benefits of having a job: structure, responsibility, camaraderie. Plus, seniors who volunteer report lower levels of stress, an increased sense of purpose and better physical and emotional health.
3. Teach, tutor, or consult.
When looking for a charitable outlet, don’t overlook the professional skills that you honed over your career.
You might not have the qualifications to teach at a school or university, but you could talk to your local community centre about holding a seminar that could benefit your neighbourhood.
Even if you’re done balancing your company’s books, but there are high school kids who could benefit from your mastery of maths and accounting. Why not open your door to local small business owners or recent college graduates who need an entrepreneurial mentor?
4. Make a plan.
It’s a scientific fact that giving makes us feel good. But it’s easy to get too caught up in our own generosity.
Your gifts and donations are coming from that same pool of assets that are supposed to keep you safe and secure for the rest of your life.
There is indeed such a thing as too much giving. You might not feel you need to think too much about gifting in early retirement but you must maintain a long-term perspective on your nest egg. You are likely to live a longer, more active life than previous generations could. You need to make sure that helping someone today isn’t going to make it harder to cover your health care and cost of living needs tomorrow.
The best plan is to make a plan.
We can help you incorporate giving into your monthly budget and retirement income plan. If you want to make your generosity more permanent, we can also help you establish a charitable trust and add sustained giving to your estate plan.
Let’s work together on a plan that will make your retirement secure and the world around you a little brighter.