In an economy in which most people can’t afford to retire ever, let alone by age 65, many of those who are able to retire are in a significantly better financial position than others.
One of the core principles of wallet activism is aligning your money to your values, and that almost certainly includes finding ways to give back, whether that be right outside your door in your community, or on a more national or global level. You may not have heard all of these ideas for giving back before. And most of these ideas can apply to folks who aren’t yet retired. Don’t wait to get involved if there’s more you can do now, no matter what life or financial stage you’re in.
Read: What Jimmy Carter, 97, can teach us about retirement
Direct giving
The biggest way to have an impact with your money is simply to donate it. Funding meals to people who are hungry, computers in schools to kids who don’t otherwise have access, or climate change advocacy to state and federal lawmakers — all of these things make a real difference. If you have spare funds to contribute, there’s no better way to align your money to your values than to give it directly to the organizations working directly on the causes you care most about. Depending on your tax situation, you may even get a tax deduction for your money you donate. If you’ve never donated significantly before and the thought makes you feel uncomfortable, remember: giving is a muscle you have to build up. Start small and commit to doing more over time.
Read: Planning to retire early? Watch out for these tax traps
Donor-advised funds
If you’re planning ahead for retirement and expect to have more disposable income now than you will in retirement, but still wish to be able to give meaningfully in the future, a donor-advised fund is an option worth considering. Like your own mini foundation, a donor-advised fund (DAF) allows you to contribute money in one or more big chunks, get the tax deduction for the contribution when you make it, and then grant that money out over time, whether you have excess money in your budget to give that year or not. Just like you would with any investment account, inquire about management fees before signing on with a DAF provider, and make sure you choose one that fits your approach to giving. For example, some will let you grant out amounts as small as $50 while others have much higher thresholds that would only be appropriate to folks who wish to give bigger grants. And, be aware that many DAF holders don’t spend down their funds in a timely way, often passing those funds on to someone else to manage after their death. That defeats the whole purpose. The goal is to have money to donate, not to hold that money forever in an account where it benefits only the investment company collecting fees on it.
Meaningful volunteering
There is a long list of ways you can volunteer to help in your community, but doing basic volunteer tasks doesn’t keep the lights on at a nonprofit the way that cash donations do. While organizations need people to walk shelter dogs and serve soup to people experiencing homelessness and hardship, seek out volunteer opportunities that truly save local organizations money, which stretches their budget and increases their impact. For example, if you have accounting skills from your career, could you volunteer to do the bookkeeping for a local organization? If you worked in public relations or marketing, could you offer to do some press outreach to help a local nonprofit fundraise toward a major goal? If you worked with boards of directors, could you offer to do board effectiveness training for local nonprofits? Using your unique skills and hard-earned expertise to benefit causes you care about can increase the effectiveness of those organizations and save them money, both of which are of enormous benefit.
Reducing your impact
Older Americans are the largest consumers of almost everything: electricity, food, transportation, water and stuff. If more retirees focused on reducing their consumption, and thus their environmental impact, it could greatly reduce overall demand for fossil fuels and other natural resources and slow the climate crisis. When you have more free time, it’s easier to reduce your impact, and most of the time, doing so also means lowering your spending, which helps your retirement budget stretch farther. Some ways you might consider reducing your impact are to:
- Downsize your home so you need less energy to heat and cool it.
- Replace a water-hungry grass lawn with a garden that also reduces the strain on local food systems.
- Commit to driving less and walking, biking or using public transportation more, to the extent you’re physically able.
- Shop secondhand and give gifts of experience rather than create more demand for newly manufactured goods.
- Take fewer, longer trips to reduce the demand you’re creating for climate-harming air travel emissions.
Local political involvement
While many bristle at the idea of getting involved in local politics, most local governments are badly in need of volunteers to get involved on committees that oversee beneficial programs like recycling, parks and recreation, and city planning. Whether you join a citizen committee to provide input on local initiatives or simply commit to attending city council meetings to provide oversight, your involvement does a real service to your community.
Simply retiring
Simply leaving the workforce after you’ve saved enough to live modestly but comfortably is a powerful act. Our capitalist culture encourages people to accumulate as much as possible, just because they can, but that mentality leads to wealth hoarding among the fortunate few and hardship for a great many more. Opting to stop accumulating after you’ve met your needs opens up employment opportunities for others and ensures that there’s enough to go around for everyone.
I bet you never knew retiring was so altruistic.
Tanja Hester is the author of Wallet Activism: How to Use Every Dollar You Spend, Earn, and Save as a Force for Change and Work Optional: Retire Early the Non-Penny-Pinching Way, host of the Wallet Activism podcast and creator of the Our Next Life blog.