Ask a Retiree: How Much Will Climate Change Affect My Retirement Plan?

I live in Arizona, and for years I have been jokingly saying, “in Arizona, we have two seasons, Heaven and Hell”. Although that continues to describe our seasons, July 2023 in Phoenix will go down as the hottest month ever recorded in a US city. Phoenix may have been the hottest, but many US cities were setting their own heat records while others were experiencing record rainfall and severe summer storms.

I believe we are well past wondering if climate change will have an impact on our retirement plans, and now beginning to understand how climate change will impact our retirement and how to be better prepared.

Climate change will likely impact retirement budgets. When it is 115 degrees outside, it takes substantial amounts of energy to cool my home to 77 degrees. Even if energy prices remain stable, we can expect to pay more in energy costs.

Property insurance is another expense that is already being impacted by climate change. Property insurance is already costly in areas prone to wildfires, hurricanes, and flooding, if you can find insurance coverage at all. Finding places with mild climates to retire may be more difficult, more popular, and more expensive.

Heat, drought, flooding, and severe storms can also take their toll on the food supply. Especially for those who want to eat more fresh fruits and vegetables to enjoy a healthy and hopefully lengthy retirement. We will also see impacts to livestock, poultry, and fish supplies, making food more expensive.

Changes in the climate may also impact our retirement activities, or at least when we do them. For much of the summer, the temperature in Phoenix is perfect for outdoor activities…at 5:00 in the morning. Even in places outside the Arizona desert, the window for comfortable and safe times for outdoor activities is getting smaller. Most of us do not want to spend our retirement cooped up inside, and getting outdoors may require planning and precautions. Heat and air quality can have greater impacts on us as we age.

There are still several strategies to help us adjust to the impacts of climate change, spend more time outdoors, and have a robust and active retirement.

For the past several decades, we have seen snowbirds migrate to warmer places like Arizona, Florida, and Texas to escape the harsh winter climates of the northern states. Maybe it is time for people from the southern states to go north for the summer to escape the harsh summer climates.

When it’s time to get out of the heat, paradise can be rented. With amazing choices like VRBO, Airbnb, and many other options, it is easier than ever to get away for a week, a month, or a summer, without having to worry about the availability of property insurance and energy costs. I have friends who rent the same house on the California coast every summer to escape the Arizona heat. Short-term rentals can also offer variety to go to different places each summer.

RVing is another way to get away from the heat, enjoy beautiful scenery and get outdoors. RVs are available in many sizes and luxuries and are available to rent or own. If you are anything like me and hotels are more your thing, there are several great websites to help you plan an extended road trip. Later this summer, my wife and I are renting a “home base” that is a short drive to hiking trails, beaches, and wine tastings, all with cooler temperatures and within reach of day excursions.

Climate change is here and already having impacts on our ability to enjoy our retirement. There are still many options to beat the heat, get outdoors and be active. It may just cost a little more and require additional planning.

This article was originally published here and is republished on Wealthtender with permission.

About the Author

Cary Smith is Director of Business Development at Client First Capital and has 35 years of experience in Financial Services. Cary retired from USAA in August 2022 after a successful career of serving the military community. During his time at USAA, Cary was the Executive accountable for a large part of USAA’s Financial Planning and Advice business with over 400 Financial Advisors in 6 locations across the United States.

Cary also served in the Navy and spent much of his Naval career aboard the aircraft carrier USS Carl Vinson. Cary lives in Cave Creek, Arizona with his wife Regina. He is on the Board of Directors for Junior Achievement of Arizona. He and Regina volunteer at their church and are active in their community.

—

Find a Financial Advisor

Do you have questions about your financial future? Find a financial advisor who can help you enjoy life with less money stress by visiting Wealthtender’s free advisor directory.

Whether you’re looking for a specialist advisor or prefer to find a financial advisor near you, you deserve to work with a professional who understands your unique circumstances.

Have a question to ask a financial advisor? Submit your question and it may be answered by a Wealthtender community financial advisor in an upcoming article.

This article originally appeared on Wealthtender. To make Wealthtender free for our readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a natural conflict of interest when we favor their promotion over others. Wealthtender is not a client of these financial services providers.

Disclaimer: This article is intended for informational purposes only and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.