Charitable giving takes priority for four-fifths of pre-retirees and retirees

A new study by Fidelity Charitable casts fresh light on the significance of philanthropy in retirement planning as a strong majority of Americans sound out their passion for advocacy.

The "Charitable Living and the New Retirement" study, which surveyed over 2,500 individuals, found that 78 percent of pre-retirees and retirees aged 50 to 80 prioritize charitable giving.

Fidelity Charitable’s head of donor engagement, Amy Pirozzolo, emphasized how entering a new phase in their life opens the door for individuals to support causes close to their hearts.

“Retirement is an exciting new chapter in life that creates opportunities for retirees to spend more time and resources in support of the meaningful causes they care about,” Pirozzolo said in a statement Monday.

The findings revealed a strong connection between retirement and increased interest in charitable activities, with nearly half of participants highlighting that they actively volunteer as well. A majority of participants, including 71 percent of pre-retirees and 55 percent of retirees, said they've volunteered in the last 12 months, with around nine in 10 of retirees who currently volunteer seeing it as a way to stay active (88 percent) and connected (91 percent).

The study comes at a time when 4 million Baby Boomers are expected to retire in 2024, a factor that could significantly impact charitable donations and volunteer efforts. The report highlights that more than two-thirds of pre-retirees (71 percent) and over half of retirees (55 percent) have engaged in volunteer work in the past year, with 27 percent of those retirees volunteering more than 13 hours per month.

Despite the strong inclination towards charitable giving, there appears to be a lack of discussion between retirees and financial advisors about donation strategies. Within the Fidelity Charitable study's pool of participants, only 51 percent of retirees and 61 percent of pre-retirees reported having conversations with their advisors about charitable planning. Additionally, awareness of donation methods remains low, with just one-third of respondents aware they can donate appreciated assets, such as stocks.

"While the intent and desire to make a difference are strong with retiring donors, there is a knowledge gap around tax-smart strategies,” Pirozzolo said.