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Boomers In Retirement: The Greatest Giving Generation?

Merrill Lynch says they may give $8 trillion in money and time

By Richard Eisenberg

One retirement study after another trumpets the boomers' lack of saving for retirement and their need to work longer than previous generations. (Wells Fargo recently said the median savings of working Americans 60 or older is $50,000.) Call these the “Me Generation” retirement reports.

But what will boomers do for others during retirement? Will they become the Thee Generation?

Maybe so. A fascinating new study from Merrill Lynch and the Age Wave research firm (Giving in Retirement: America's Longevity Bonus) predicts that boomer retirees potentially will give the equivalent of $8 trillion through charitable donations and volunteering over the next two decades. The longevity bonus is the demographers’ term for the population's increased life expectancy.

If they’re right — and I have some qualms about the precise dollar estimate, which I’ll explain shortly — this will make boomers the greatest giving generation in U.S. history.

What the Longevity Bonus Means for Giving

“When the longevity bonus goes wild, it’s conceivable that America could open its arms as more retirees give more of themselves to their communities,” says Ken Dychtwald, founder and CEO of Age Wave.

Adds Lorna Sabbia, head of retirement and personal wealth solutions for Bank of America Merrill Lynch: “Retirees have access to more savings and more time than younger people.” Consequently, she says, America’s 76 million boomers (now age 51 to 69) will be more generous as they retire at the rate of 10,000 a day.

Will Boomers Really Give $8 Trillion?

To arrive at that $8 trillion figure, Merrill Lynch extrapolated into the future from current charitable giving and volunteering rates, using projections from Boston College.

Boomer retirees, Merrill Lynch said, will give $6.6 trillion to charity over the next 20 years (“That’s a conservative number, since it’s in today’s dollars,” says Dychtwald) and give the equivalent of $1.4 trillion worth of service as volunteers, based on a projected 58 billion hours served.

Dychtwald thinks the volunteering dollar figure may be low, too. It’s based on the estimate by the nonprofit coalition Independent Sector that one hour of volunteering has a value of about $23. “But what if a retired lawyer is helping a nonprofit? Or a retired teacher is helping children? Is that $23 an hour? Or is their level of skill capability far more valuable than we ever imagined?” he asks.

I’m skeptical of Merrill Lynch’s donation projection figures because I’m not convinced that retiring boomers in the next two decades — many with paltry savings and without pensions (unlike retirees of the past 20 years) and some facing steep health- and long-term care costs — will be flush enough to be so generous.

How many retired boomers will volunteer and how much time they’ll give, I think, are also open questions, since no one knows how healthy they’ll be nor their proclivity to spend some of their free time lending a hand.

Regardless of the exact numbers, though, I think the researchers are on solid ground about the potential for retired boomers to be extraordinarily kind for many years.

One reason: 65 percent of retirees surveyed by Merrill Lynch felt that retirement is the best time in life to give back. Most (84 percent) said an important reason is that they have greater skills and talents than when they were younger. For its report, Merrill Lynch surveyed 3,694 Americans 25 and older, including 2,140 boomers.

Why Giving Grows in Retirement

“I was talking with [ founder and CEO] Marc Freedman about what propels people to make giving a priority,” says Dychtwald. “He had a one-word answer: Death. When you’re 60 or 70, you think more deeply than when you’re younger about what matters to you, how you want to be remembered and the impact you want to have.”

The charity numbers in the Merrill Lynch report bear this out: Retirees comprise just 31 percent of the adult U.S. population today, but contribute 42 percent of money given to charity and 45 percent of total volunteer hours. “The projections are that, in 20 years, 60 percent of all charitable giving will be by people over 65,” notes Dychtwald.

In the survey, 80 percent of people 65 and older said they give to charity, compared with 62 percent of those 35 to 44. The average amount given: $1,672, far more than the $949 average for people 35 to 44.

A smaller percentage of people 65 and over volunteer compared with those aged 35 to 44 (24 percent vs. 30 percent). But the 65+’ers who do volunteer give more than twice as much time as people 35 to 44: 133 hours per year, on average, for people 65+ compared to 58 hours.

Boomers Vs. Their Parents' Generation

The report also showed that boomers think they give more thoughtfully than their parents’ generation.

Nearly half of boomers surveyed (49 percent) said their generation is more likely to seek to understand how a charity uses its money before donating than their parents’ generation; only 9 percent thought the reverse was true.

“Boomers want to see the impact of donating money,” says Dychtwald. “It’s not enough for them to feel good about giving. They want to know that what they’re doing will make a difference.”

And boomers — true to their reputation — want to have more of a say when they make their contributions: 44 percent of boomers think their generation is more likely to prefer to specify how charitable donations are used.


Boomers also felt their parents' generation was more likely to want to give to larger charitable organizations and more trusting of charities: 44 percent said their parents’ generation believe charities spend donations in the best possible way, but only 19 percent of boomers think their own generation believes they do.

“I think what we’re seeing is that mom’s and dad’s generation had great respect for institutions and felt if they made a contribution to a church or a hospital they cared about, it would turn out fine,” says Dychtwald. “Boomers are skeptical of institutions.”

How Retirees Approach Charitable Giving and Volunteering

A few other intriguing survey tidbits about today’s retirees:

Female retirees are more giving of their money and time than their male counterparts. “Women bring a different tone and character to giving,” says Sabbia. “They define success in retirement more by generosity than by wealth.”

A sizable 81 percent of the retired women said they donate to charity, while 71 percent of retired men do. And 29 percent of retired women volunteer to charitable causes, slightly more than the 22 percent of men.

Married women are more likely than their husbands to be in charge of the couples’ volunteering decisions. Among the married retirees surveyed, 34 percent of wives take the lead; only 22 percent of husbands do.

Many married couples don’t talk about giving plans with each other. Only about half of married retirees said they discuss with each other how much money to give to charities or the best giving strategies.

Retirees feel more unshackled about their giving choices than when they were younger. Nearly three-quarters of them (72 percent) said that compared to how they gave before they retired, in retirement “I am able to give how I want, instead of how others expect me to.” Dychtwald’s analysis: “People said, ‘Now I have things that matter to me.’”

Many retirees have trouble confidently selecting charities. Roughly 40 percent of retirees surveyed said they’re concerned about the trustworthiness of charitable organizations and that there are too many charity options to choose from.

Most retirees don’t use technology for their charitable giving. Only 24 percent give money to charities online. And just 9 percent use websites that measure charities based on their effectiveness. “Tech people may be missing a target audience,” says Dychtwald. Or, put another way, given the number and overall wealth of boomers, they may be crowdsourcing to the wrong crowd.

Getting a tax deduction isn’t a big motivating factor for their charitable giving or volunteering. In fact, only 16 percent of retirees called the write-off their greatest motivation, which surprised Sabbia. By contrast, “making a difference in the lives of others” was five times more important; 81 percent called it their top motivation.

Advice to Boomers on Giving Wisely

So how can you unleash your longevity bonus when giving money or time in retirement? Focus.

Merrill Lynch recommends looking for ways to deeply engage with a charitable organization you have passion for, and combine contributions of your money and time for the greatest impact and fulfillment.

But one caution: Don’t be so generous with your money that you endanger your retirement in the process. The Merrill Lynch report advised: When “giving while living,” carefully balance your giving objectives with your own retirement financial security.

“How much to give is particular to each individual,” says Sabbia. “But you don’t want to bankrupt yourself by doing good. You want to maintain a lifestyle you feel comfortable with.”

Photograph of Richard Eisenberg
Richard Eisenberg is the former Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and former Managing Editor for the site. He is the author of "How to Avoid a Mid-Life Financial Crisis" and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Read More
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