The case for calculating climate risk into retirement plans
The typical ad picturing retirement highlights leisure, but people near retirement and early in retirement may find the major life transition difficult. There is so much to consider, from guesstimating how long savings will last to when to claim
Now, the people planning for retirement may want to account for an additional factor when choosing a place to settle down: climate change risk. "Several of the most popular retirement Meccas in the
The following is an edited transcript of their conversation:
Ben-Achour: So how does that affect retirement? I mean, I guess, in one way it affects where you decide to live. Right?
Farrell: Well, this is one of the biggest issues, right, several of the most popular retirement Meccas in the
Ben-Achour: So climate change is expensive. We know that. But is that not a problem for insurance companies to deal with? Or do you think people should be saving more to deal with disasters like flooding or weather damage?
Farrell: You know, we always say save more, save more. And yes, the answer is, you should save more. But it's hard to do. I mean, you know, one of the costs of all these extreme weather events with global climate change is that if you're in an area with a lot of risks, your insurance premiums may be higher, and to qualify for coverage, insurance companies may want expensive changes to the home to make it more resilient to climate change. And then you think about rebuilding a life following an extreme event like wildfires and flood zones. I mean, it takes its toll not only on your finances, but you know, it's emotionally draining.
Ben-Achour: So if someone hears this and wants to incorporate climate change planning into their retirement planning, what do they do? How do people navigate all this?
Farrell: OK, first of all, congratulations. Second, there's not a whole lot of research out there yet. But there are resources. The best or one of the most interesting I find is the climate summaries from
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