What You Need to Know
- Snowstorms and hurricanes have an obvious effect on homeowners.
- They can also lead to injuries, climate-related illnesses and higher energy bills.
- Clients might want to factor climate change into thinking about where to live.
Climate change is poised to affect retirement planning dramatically. Are your clients prepared?
“As if retirement income planning isn’t already a challenge, you must now factor in the high cost of climate change.”
There is now an added complexity to the planning process and a sense of urgency as climate change affects retirees. No matter if climate change is manmade, a natural cycle, or a combination of both, the economic, physical, and emotional toll of climate-change disasters has the potential to upend even the most solidly-constructed retirement plans.
Climate changes issues will likely influence many of your client’s future financial decisions. This could include relocation, how they will pay for the increased costs of goods and services, and additional money problems arising from catastrophic events. For this reason, 21st-century financial blueprints should include provisions for climate change.
As advisors, agents, and financial educators, we are tasked with helping our clients plan for the many elements that erode their wealth, such as inflation, longevity, taxes, and medical costs. Unfortunately, many of us haven’t given climate change a second thought. Advisors who think ahead and successfully adapt to climate change will become sought-after experts in their communities.
Health, wellness, and medical expenses will increase.
According to a recent report from the Natural Resources Defense Council (NRDC), climate change currently adds around $820 billion to health costs in the United States.
That amount is expected to increase exponentially in the next decade. These increased medical expenditures result from medical care needed after a natural disaster, wages lost due to climate-related accidents and injuries, and increases in chronic illnesses from climate-induced increases in air pollution.