The Impact of Climate Change on Retirement Planning

Climate change is affecting us in ways no one could have imaged just a few years ago, and those dramatic changes in weather patterns may even affect your retirement. In recent years the world has been plagued by higher temperatures and increases in both the volume and intensity of natural disasters. You may need to incorporate the impact of climate change into your retirement planning.

Climate Change and Your Retirement Location

Most people retire in place, meaning that they stay in the home they have lived in and raised a family. Those who relocate for retirement often choose warmer climates like Florida, Texas and Arizona. But before you relocate to a dream retirement spot with warmer weather, do your research. The increased incidence of wildfires, floods and hurricanes in states like Florida, Texas and California might give you reason to reconsider your relocation plans.

For example, toxic wildfire smoke can make it difficult to enjoy your retirement years and exacerbate health problems. Mick Smyer, founder and CEO of Growing Greener in Lewisburg, Pennsylvania, says he has friends who left Napa Valley and retired in Washington State to escape the threat of wildfires, but then experienced smoke from Canadian wildfires that affected their health in Washington State. They have now relocated again to central Pennsylvania. “People talk to financial planners about longevity’s impact on their retirement, but they seldom ask how climate change might affect the place they hope to retire to in 15 or 20 years,” Smyer says.

[See: The Best Places to Retire in 2022.]

Climate Change and Your Retirement Budget

Climate change may impact your retirement budget, especially if you have to pay for air conditioning or to repair your home after a natural disaster. It may also be increasingly difficult or expensive to buy insurance for natural disasters. Dan Hawley, president of Hawley Advisors Wealth Planning in Walnut Creek, California, says his clients built a home at the foothills of the Sierra Nevada mountains and were shocked to find that their homeowner’s insurance quadrupled to $4,000 a year. “Four thousand a year eating away at your retirement budget is a very significant amount of money, and I don’t think when they built this house in the mountains that my clients factored that in,” Hawley says.

Preparing for natural disasters can be a significant and costly expense. “You see it on the news. A storm is going to hit Florida. You’ve got to get plywood to board up your home,” says Louis D. Bailey, manager of membership and organizing at WE ACT for Environmental Justice in Washington, D.C. “It’s definitely a factor all over the country, but it’s hitting low-income people more harshly than others. There’s a financial aspect of just being able to get up and go, and where are you going to go?”

[See: Retirement Spots With Year-Round Nice Weather.]

Climate Change and Your Health

Existing health problems could be exacerbated by environmental concerns such as extreme heat or wildfire smoke. “Older adults are more vulnerable to some of the health impacts of climate change,” Smyer says. “For example, the impact of extreme heat can lead to heat distress. Sometimes the medications that older adults are on interact with heat.”

Older adults with limited mobility are often the most impacted by extreme weather events. “What we call the urban heat island effect happens in areas like Washington, D.C., and New York, where there is a lot of concrete. That impacts health — diabetes, hypertension and asthma,” Bailey says. “And if you don’t have cooling in your apartment or home, you’re more likely to suffer one of those heat related events.”

Home Improvements Can Help the Environment

You may be able to make home improvements that could help the environment and perhaps even save you money over time. But consider making expensive changes while you still have steady income, before you retire. “When our seniors are in older homes, some of the infrastructure in these buildings is just so old that it needs a full upgrade,” Bailey says. “And at retirement age you just can’t get up and find another apartment or move, so you’re stuck in place and that leads to a lot of isolation for our seniors as well.”

Many states and cities have programs that will subsidize solar panels. Consider replacing old appliances and HVAC systems with more energy efficient models. New windows can be expensive, but they can dramatically increase energy efficiency.

[SEE: The 10 Sunniest Places to Retire]

Climate Change Volunteer Work

Climate change offers opportunities for older Americans to get involved and volunteer. “We know that older adults in retirement have time, they have experience and they have a motivation,” Smyer says. “Many older adults say one of the challenges of retirement is a sense of purpose. And for many older adults, climate action, and leaving the world a better place for their kids and grandkids for future generations, is an answer.”

More from U.S. News

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Affordable Mountain Towns for Retirement

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