Merrill Lynch Study on Giving in Retirement Reveals $8 Trillion Longevity Bonus

Survey Shows Generosity of Time, Money and Skills Peak in Later Life

NEW YORK–(BUSINESS WIRE)–A new Merrill Lynch study reveals a potential giving surge in the United
States over the next two decades valued at an estimated $8 trillion, due
to the aging baby boomer generation, increasing life expectancy and high
rates of giving among retirees. The study, “Giving
in Retirement: America’s Longevity Bonus
” conducted in partnership
with Age Wave, found that with more time, savings and skills to
contribute to the charities and causes they care about, 65 percent of
retirees agree retirement is the best time in life to give back.

“We’re seeing that retirement unleashes new opportunities to give that
can positively impact the world,” said 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.”

The new research explores the priorities, rewards and challenges of
giving in retirement. Based on a nationally representative survey of
more than 3,600 respondents of all income levels, this study examines
giving trends across generations and genders. The study also looks at
the benefits of giving back in retirement – for retirees, their families
and society at large.

America’s “longevity bonus”

Through their combined donating and volunteering contributions to
nonprofits and causes, the boomer generation is poised to create a
“longevity bonus” estimated at a cumulative $8 trillion over the next
two decades in the United States. Three forces will drive this surge in
giving:

  1. The movement of the massive boomer generation into their retirement
    years.
  2. Increasing longevity, which means more people will spend more years in
    retirement.
  3. The high rates of giving, including time, money and skills, among
    retirees.

Based on giving rates among retirees today, charitable giving from
retirees will increase to an estimated $6.6 trillion over the next two
decades.1 In the same timeframe, the retirement of the boomer
generation is projected to generate 58 billion volunteer hours. Using an
industry standard for valuing volunteer time, retirees will contribute
almost $1.4 trillion worth of service.2

“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,” said 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.”

Retirement: The best time to give

According to the report, older Americans have more time, money and
skills to contribute to causes they care about than younger adults. For
instance, more people age 65-plus donate money or goods than any other
age group, and give the greatest amount – more than double that of
younger adults.

Although slightly fewer (24 percent) older adults volunteer compared to
other age groups, those who do volunteer contribute more than twice as
much time. The research found volunteers over age 65 volunteer an
average of 133 hours per year, compared to those ages 25-34 and 35-44
who volunteer an average 55 and 58 hours per year, respectively.

Retirees bring a lifetime of experience when they give back. Eighty-four
percent of retirees say an important reason they are able to give more
in retirement is that they have greater skills and talents compared to
when they were younger.

“Retiring boomers are a new and growing force in the giving space that
can’t be ignored,” 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.”

Now that they are in retirement, retiree respondents say they are
positioned to give in ways that better match their personal priorities
and passions (77 percent), are more thoughtful and focused (64 percent),
and have a more meaningful impact (59 percent).

Giving gives back: Success redefined

The report found that for many, giving is a key ingredient to a better
retirement. Compared to those who do not volunteer or donate, retirees
who give say they have a stronger sense of purpose (59 percent vs. 43
percent), higher self-esteem (57 percent vs. 51 percent), and are both
happier (66 percent vs. 52 percent) and healthier (50 percent vs. 43
percent) than those who do not contribute.

Giving can also be an important source of social connections in
retirement. Although pre-retirees predict a reliable income is what they
will miss most after leaving the workforce, in reality, retirees say
that it is the social connections that they miss.3
Eighty-five percent of retiree volunteers say they have developed
important new friendships through their giving and volunteering
activities.

Retirees are three times more likely to say helping others makes them
happier than spending money on themselves (76 percent vs. 24 percent).
Retirees are also nearly six times more likely to say “being generous”
defines success for them than “being wealthy.”

The more generous gender

Retired women are even more likely than men to say retirement is the
best time to give back (68 percent vs. 62 percent) and that generosity
defines success over wealth (90 percent vs. 79 percent). Also, the
report found more retired women donate (81 percent of women retirees vs.
71 percent of men retirees) and volunteer (29 percent of retired women
retirees vs. 22 percent of men retirees) to charitable causes.

Women are increasingly taking control of inheritance and giving
decisions, both to family and charitable causes, in part because of
their superior longevity. Women are three times more likely than men to
be widowed in later life, and therefore often decide how and where to
pass on assets. Among people age 55 and over, unmarried women contribute
nearly half of all charitable bequests.4

Giving to family

According to the study, three in four (77 percent) retirees prefer to
give money to family while they are still alive, rather than waiting
until the end of life. The Merrill Lynch Family
& Retirement: The Elephant in the Room Study
(November 2013)
revealed that more than six in 10 people over the age of 50 provide
financial support to family members.

While a financial inheritance can be an important part of one’s legacy,
the study reveals retirees consider values and life lessons to be twice
as important to pass on to future generations than financial assets and
real estate (62 percent vs. 32 percent). Additionally, younger
generations overwhelmingly say they are more interested in receiving
values and life lessons than financial assets (55 percent vs. 22
percent).

Challenges to giving

Retirees cite concern about the trustworthiness of charitable
organizations (41 percent), too many options to choose from (39 percent)
and financial limitations (39 percent) as the top barriers that limit
their giving, according to the research.

When seeking advice for how best to give, the report found retirees say
that, above all, they are seeking a guide who understands their values
and priorities (52 percent), and someone who can help them research and
identify which charities and causes to support (37 percent).

“When individuals and families take the time to develop a giving
strategy based on what’s meaningful to them and the impact they want to
have, they give more, and feel more fulfilled. In fact, a 2014
U.S. Trust study
found that knowledgeable and engaged donors
experience greater personal fulfillment and give larger amounts to
charitable causes, and respondents in this study who feel fulfilled
donate more than five times the amount of those who are not fulfilled,”
said Keith Banks, president of U.S. Trust, Bank of America Private
Wealth Management.

To download “Giving in Retirement: America’s Longevity Bonus,” visit www.ml.com/retirementstudy.
This report is the sixth in a series of in-depth retirement studies that
began with an inaugural benchmark study followed by subsequent studies
focusing on each of the seven life priorities, including family, work,
health, home, giving, leisure and finance. To explore additional content
and resources related to these seven life priorities, visit www.ml.com/retire.

1 Boston College, Age Wave/Merrill Lynch calculations based
on U.S. Census Bureau population projections
2 Giving
USA, 2015; Age Wave/Merrill Lynch calculations based on U.S. Census
Bureau population projections
3 Work in Retirement:
Myths and Motivations, Merrill Lynch and Age Wave Study, 2014
4
American Charitable Bequest Demographics, 2013

Age Wave
Age Wave is the nation’s foremost thought leader on
population aging and its profound business, social, healthcare,
financial, workforce and cultural implications. Under the leadership of
founder and CEO, Ken Dychtwald, Ph.D. Age Wave has developed a unique
understanding of the body, mind, hopes and demands of new generations of
maturing consumers and workers and their expectations, attitudes, hopes,
and fears regarding retirement. Since its inception in 1986, the firm
has provided breakthrough research, compelling presentations,
award-winning communications, education and training systems and
results-driven marketing and consulting initiatives to over half the
Fortune 500. For more information, please visit www.agewave.com.
Age Wave is not affiliated with Bank of America Corporation.

Merrill Lynch Global Wealth Management
Merrill Lynch Global Wealth
Management is a leading provider of comprehensive wealth management and
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Financial Advisors and over $1.9 trillion in client balances as of
September 30, 2015, it is among the largest businesses of its kind in
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goals-based wealth management, including planning for retirement,
education, legacy, and other life goals through investment, cash and
credit management. Within Merrill Lynch Global Wealth Management, the
Private Banking and Investment Group focuses on the unique and
personalized needs of wealthy individuals, families and their
businesses. These clients are served by more than 150 highly specialized
Private Wealth Advisor teams, along with experts in areas such as
investment management, concentrated stock management and
intergenerational wealth transfer strategies. Merrill Lynch Global
Wealth Management is part of Bank of America Corporation.

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