Giving Back While Getting Away

OCEAN CITY — Retired Americans are proving to be extremely generous, and their generosity extends far beyond money. They’re giving their time and experience in a very hands-on way to the causes they care most about. In fact, they have the highest volunteer rate of any age group — and any generation before them, according to Keeping Baby Boomers Volunteering, a report by the Corporation for National and Community Service.

Their desire to make a difference has also had a big impact on how they vacation. A safari, for instance, may include a week’s stay at a sanctuary to bottle-feed orphaned lion cubs. A trip to legendary Machu Picchu could extend to several months’ work helping to build schools in the Andes Mountains. Retirees who take on such projects are finding a warm reception for their efforts, particularly in such countries as Japan and India, which traditionally treat experience and age with reverence. "Volunteers over 50 often have an easier time integrating into the communities they’re assisting," says Doug Cutchins, one of the authors of Volunteer Vacations: Short-Term Adventures That Will Benefit You and Others.

Many volunteer vacations sound alluring on paper, but midway through a backbreaking archeological dig you may have second thoughts.

As you research volunteer vacation opportunities, consider how many hours a day you want to work, the length of time you want to volunteer, the amount of physical labor you’re willing to perform, and the age range of the people you’ll be volunteering with, so you can find the best fit for yourself. Talking with others who have gone through the experience can help you get a better sense of each opportunity. Organizations should be eager to give you the names of past participants for reference, says Cutchins.

If you’re traveling abroad and you plan to stay in one place for several weeks, you may want to set up a local bank account. That way you can have the funds you’ll need to cover your living expenses.

"Since currencies fluctuate in value, it’s a good idea to arrange for periodic transfers of money rather than a lump sum," says Bill Hunter, director of Personal Retirement Solutions for Bank of America Merrill Lynch. Also, if you’re going to be away for a month or more, you’ll need to make financial arrangements to cover expenses at home and abroad. "You’ll have to continue to maintain your home and to pay property taxes and homeowner’s insurance as well as your utility bills while you’re gone." Depending on where you’re traveling and what activities you’ll be engaged in, you may also want to set aside extra money to cover emergency medical evacuation insurance. For those already retired, the timing of when you take extended travel can be critical.

"The market conditions under which you make withdrawals from your retirement accounts in early retirement can make a huge difference," Hunter says. "If the market is having a bad year, you’ll want to try to withdraw less" or at least slow your withdrawals in subsequent years so that your assets have a chance to recover. And make sure the cost of a volunteer vacation is in line with your long-term spending strategy, he says. "It’s natural to spend more in your early retirement years, but you also have to look down the road and anticipate higher spending later in life due to increasing health care costs."

Your financial advisor can help you create a thoughtful strategy for managing your income needs during your volunteer vacation, without jeopardizing your future security

(A Merrill Lynch Wealth Management Advisor who can be reached at 410-213-8520.)