Volunteer vacations: Give back while getting away

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Volunteering on vacation can be a rewarding experience
Doing something to make the world a little better while seeing the sights may require some extra financial preparation, but the rewards can be great.

Key points

  • Consider how much time you'd like to devote to your trip, how many hours per day you think you can work, and how much physical labor you'd like to perform
  • Be sure to think through the financial implications of an extended stay in another country — even whether you may need to open a local bank account
  • Ask your tax advisor whether some or all of your volunteer vacation costs could be tax-deductible, as a possible means of defraying costs
  • Related content: Read up on other ways to support a cause that aligns with your values
The whole point of travel is to do something that fulfills you — to replenish your energy by unplugging and relaxing, and to expand your knowledge. For a growing number of people, that sense of fulfillment is connected to the need to accomplish something that makes a difference, even a small one, in the world.
Ever thought of helping to build a house for a needy family in the mountains of Appalachia? Creating a safe place for Costa Rican sea turtles to hatch their eggs? Participating in an archaeological dig in Pompeii? Volunteer vacations can afford you the chance to do something meaningful with your time. And for some — especially those near or in retirement — an extended volunteer trip can be a gateway into life's second act.
Measuring success and happiness in retirement
Source: Giving in Retirement: America's Longevity Bonus, Merrill Lynch, 2015. The research study was completed in July 2015 in partnership with Age Wave. The survey was conducted among a total sample of 3,694 adults aged 25 and older, who were nationally representative of age, gender, ethnicity, income and geography.
Whatever you're hoping to get out of a volunteer trip, there are a few tips that can make the experience more enjoyable.
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 access the funds you'll need to cover your living expenses.

Be clear about what you want to get out of your experience

Many volunteer vacations sound alluring on paper, but midway through a backbreaking archeological dig you may have second thoughts. Be very thoughtful about your goals and what success means to you. Do you want to donate your skills, or are you more interested in trying something new? Older vacation volunteers may be in especially high demand because of their extensive work experience. Some economic development organizations will even pay your travel and living expenses if you have the skills they need. But if your goal is to stretch your horizons, then select a vacation that doesn't depend on sharing what you already know.
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
  • The age range of the people you'll be volunteering with
In this way, you can find the best fit for you. Also, talking with others who have gone through the experience can help you get a better sense of each opportunity. Some organizations may be able to help you get in contact with past participants for reference.

Matching your interests to a cause

If the idea of a volunteer vacation appeals to you, here are some resources to help you get started.
Earthwatch Institute, www.earthwatch.org
As an Earthwatch volunteer, you'll work alongside world-renowned scientists conducting important field research.
Xperitas (formerly Global Citizens Network), www.xperitas.org
Find opportunities to work with primarily indigenous communities in Africa, Asia, Latin America and the United States.
VolunteerMatch, www.volunteermatch.org
Use this resource to find volunteer opportunities by cause, location, skills and more.

Manage your expenses

If you're traveling abroad and plan to stay in one place for several weeks, you may want to set up a local bank account. That way you can access the funds you'll need to cover your living expenses. "Because 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. "If you're a homeowner, 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." Renting out your home could help to defray some of those costs, Hunter points out, but you may incur others, such as buying an umbrella insurance policy to provide liability coverage for your tenants. He suggests asking your tax advisor whether some or all of your volunteer vacation costs could be tax-deductible, as another possible means of defraying costs.
Depending on where you're traveling and what activities you'll be engaged in, you may also want to consider purchasing emergency medical evacuation insurance. Some travel insurance packages may also cover emergency evacuation, so that could be another option.
Make sure the cost of a volunteer vacation is in line with your long-term spending plan.
— Bill Hunter,
director, Personal Retirement Solutions,
Bank of America Merrill Lynch

Don't lose sight of your bigger financial picture

If your volunteer vacation takes the form of a sabbatical from work, keep in mind that you won't be able to contribute to a 401(k) while you're away. You will, however, be able to take advantage of catch-up provisions when you return to make up some of the shortfall, as long as you're 50 or older. If you've had any earned income during a volunteer year, you may also be able to contribute to an IRA, says Hunter.
For those already retired, choosing the right time to make an extended trip 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. "So if the market is having a bad year, you'll want to try to think about how that might affect your long-term withdrawal strategy." And make sure the cost of a volunteer vacation is in line with your long-term spending plan, 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."
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