Climate Change and Retirement Planning

Some holistically-minded planners provide discounted or free services such as gym memberships, yoga classes, dietary advice, blood pressure management, and other health-focused value-adds. These relatively low-cost options work wonders to position you and your firm as a forward-thinking agency concerned with the environment as well as the well-being of its clients.

Where will your clients live when they retire?

As temperatures rise and weather-related disasters become more frequent, retirees may re-think flocking to traditional retirement meccas such as Texas, Arizona and Florida. Whether to relocate or downsize has always been an issue for those about to retire. Climate change further complicates these decisions, meaning retirement planners must get and stay ahead of the curve for “green” retirement design.

Higher costs for energy, food, water, and insurance could devastate retirees.

The rising price of electricity, natural gas, and heating oil affects nearly all your senior clients. Climate change will drive up costs for heating and electricity, directly affecting a senior’s lifestyle in retirement. Savvy advisors will incorporate these cost of living spikes into their portfolio designs and help clients find ways to safeguard their savings.

Adding a natural disaster component to a financial plan makes good sense. For example, suppose you have pre-retiree clients who own property in flood zones along the coasts, near river basins, or in areas prone to wildfires. In that case, you must help them factor increased insurance costs into their plans.

Less affluent seniors, many dependent on senior services, food banks, and other programs, will likely see these services strained by climate change and demographic shifts due to an aging population. Social safety nets may fray, becoming unstable and leaving the unprepared struggling to survive on fixed incomes.

To sum it up: Climate change will impact us all, especially those planning to retire in the next five to 10 years. However, climate change issues may afford opportunities for forward-thinking agents and advisors to set themselves apart.

Bill Duggan is a retirement planner at The Retirement Advantage, in Almont Michigan.

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