5 tips to increase your generosity without jeopardising your retirement

February 20, 2020

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. 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.

Recently, there have been high-profile cases of fraud, misappropriated funds and questionable behaviour from some senior staff at some charities. But even if you’re giving to a charity that is run well, you should understand where your money is really going. If you’re happy with your money helping a larger organisation to pay its bills and employees, great. If you want your money to have a more immediate impact on those in need, consider giving to smaller organisations in your community.

Do some googling and check online watchdog databases to make sure your favoured charity is on the up-and-up. And unless you know the organisers personally, avoid online crowd-funding campaigns that aren’t legally accountable for how they use donations.

2. Become a trustee, or even set up your own charity.

If a particular area is close to your heart, or you just want to get involved generally, consider becoming a trustee of a charity.

As you may be aware, our director, Scott Gallacher, is a trustee of The Ectodermal Dysplasia Society (Charity No. 1089135), a charity dedicated to improving the health and well-being of people whose lives are affected by Ectodermal Dysplasia (ED).

Perhaps you have particular skills that would be very helpful.

For example, a retired accountant or bookkeeper might be the perfect treasurer for a charity, whilst a former journalist could help a charity write newsletter articles or press releases.

3. Consider a volunteer position.

Your favorite non-profit or charitable organisations need money. But they also need manpower. For example, our director, Scott Gallacher is an active member of the Rotary Club of Leicester and many of their members are retirees who wanted to continue actively contributing to their community. Rotary Clubs such as the Rotary Club of Leicester, and other organisations are always looking for new members.

If you’re thinking about working part-time in retirement and a pay cheque isn’t really important to you, give regular volunteer hours instead. You’ll get all the same benefits of having a job: structure, responsibility, camaraderie. Plus, people who volunteer report lower levels of stress, an increased sense of purpose, and better physical and emotional health.

4. 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 local area. You might be done balancing your company’s books, but there are children who could benefit from your mastery of maths. Open your door to local small business owners or recent graduates who need an entrepreneurial mentor.

5. Make a plan.

It’s a scientific fact that giving makes us feel good. But some retirees may get too caught up in their generosity. They forget that gifts and donations are coming from that same pool of assets that are supposed to keep them safe and secure for the rest of their lives. They may have trouble setting limits and saying no.

There is indeed such a thing as too much giving and there have been reports of retired people being ‘hounded’ by charities. It was reported that one unfortunate poppy seller was receiving almost 3,000 charitable requests a year.

You might not think much about writing an extra cheque or two early in retirement. But retirees have to maintain a long-term perspective on their nest eggs. This generation of retirees is going to live longer, more active lives than any in history. You need to make sure that helping someone today isn’t going to make it harder to cover your own cost of living needs tomorrow.

So, if you and your spouse want to make regular charitable donations, it’s important that you come in and talk to us. We can 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.

We’re always happy when our clients want to help others. But it’s our responsibility to make sure your financial plan covers your best interests first. Let’s work together on a plan that will make your retirement secure and the world around you a little brighter.