Why 2024 Is the Year to Shift from Wealth Accumulation to Philanthropy (And How to Start)

Why 2024 Is the Year to Shift from Wealth Accumulation to Philanthropy (And How to Start)

Have you ever wondered why so many people shift their financial focus as they grow older? It’s not uncommon for wealth accumulation to take a backseat to gifting and philanthropy in later years. As legacy-building becomes more important, understanding how to incorporate these values into your financial plan is crucial. In this blog, we'll explore the psychological, cultural, and financial reasons behind this shift and show you how Pinnacle Wealth Advisory can help you create a plan that aligns with your values and long-term goals.

1. The Psychological Shift Toward Philanthropy - As people age, their priorities change. Research shows that empathy and agreeableness increase with age, leading to a natural inclination to focus on prosocial behaviors such as philanthropy. This emotional fulfillment, often referred to as the "warm glow" effect, motivates older adults to prioritize giving over continued wealth accumulation.

2. Legacy-Building and Social Bonds - Legacy plays a significant role in financial decisions later in life. For many, the desire to leave behind something meaningful—whether for family, society, or both—guides decisions around gifting and charitable giving. Social bonds, too, become more important, as individuals seek to strengthen connections and pass on their values through acts of generosity.

3. Financial Considerations for Older Adults - While emotional factors drive philanthropic behavior, financial considerations remain critical. Many older adults face the challenge of balancing wealth decumulation with the desire to give. Products such as annuities, reverse mortgages, and life insurance can be tools to ensure a steady income while fulfilling philanthropic goals.

4. How Pinnacle Wealth Advisory Can Help - Pinnacle Wealth Advisory, led by Doug Greenberg, CIMA, specializes in helping clients transition their financial focus from growth to legacy-building. By incorporating philanthropy into your financial plan, you can ensure that your wealth serves a greater purpose while still providing for your family. Our team can help you develop a tailored strategy that balances giving, legacy, and financial security.

As you age, your financial plan should evolve with your changing priorities. At Pinnacle Wealth Advisory, we’re here to guide you through that journey, ensuring that your legacy lives on. Ready to start planning? Leave a comment below, or contact us today for a personalized consultation.

Compiled by Doug Greenberg, President of Pinnacle Wealth Advisory