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Climate change is affecting retirement.How retirees are adapting

The icicles are hanging on State Highway 195 signs on February 18, 2021 in Killeen, Texas.

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The threat of climate change is changing the retirement plans of some older Americans.

Due to extreme weather events such as hurricanes, floods, sub-zero temperatures, and wildfires, some people rethink where to spend the golden age.

John McGlothlin III, Certified Financial Planner at Southwest Retirement Consultants in Austin, Texas, said:

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A client planning to retire in Galveston, Texas, he said, wasn’t prepared for the soaring costs of flood insurance. The average cost of flood compensation in Texas is $ 700 per year, but premiums can be higher in some areas.

Another Austin client suffered a severe freeze and power outage in the area in February. When the pipes froze and the apartments were flooded, they began to question their long-term plans, McGroslin said.

With another coldsnap, more home damage or the possibility of future evacuation, they are rethinking where they live. But there is a problem: the unit may not get the same price after the flood, he said.

However, lower home prices can cause other problems for retirees.

Due to low home equity, retirees may have limited flexibility to use their assets to pay for long-term care and other medical costs, McGroslin said.

“We have to think very much about what the environment brings to real estate and what that means for long-term retirement plans,” he said.

Not a worry for all retirees

Some retirees are worried about the risks of hurricanes, quick freezes and wildfires, while others are less worried about climate change.

Matt Stephens, founder of AdvicePoint at CFP based in Wilmington, NC, said:

Wilmington’s coastal areas have experienced hurricanes and floods, but he said they are still a popular destination for retirees, especially along the waterfront.

“People want those traits,” Stevens said.

When choosing a place to retire, he added, many clients want to be close to their families, scenic areas, mild weather, and a reliable hospital system.

Additional insurance costs

In some areas, homeowners may face rising insurance costs, whether retirees stay or go.

In North Carolina, people living east of Interstate 95 need to buy wind and hail insurance separately, in addition to homeowner insurance, Stevens said.

Zebra reports that the average cost of wind and hail insurance in North Carolina could be nearly $ 1,700.

“Wind and hail insurance has been steadily increasing over the years,” he said.

In addition, according to ValuePenguin, waterside people may need flood insurance, spending an average of $ 739 more annually in North Carolina.

Also, it can be difficult to find coverage for certain natural disasters. For example, people who live in wildfire-prone areas may have a hard time finding affordable insurance.

“If you have a home in the Rocky Mountains, you’ll either have a hard time finding insurance or you’ll have to pay a lot of money,” McGroslin said.

Climate change is affecting retirement.How retirees are adapting

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