Recent fires, floods, and extreme heat events are demonstrating that climate change is here—now—not some day in the distant future. How could that realization impact your retirement plans?

Any concern you might feel about climate change could depend in part on your age. A recent survey conducted by the Society of Actuaries (SOA), titled “Financial Perspectives on Aging and Retirement Across the Generations,” takes a deeper look into the topic and provides insights into how different generations view the importance of climate change when planning for retirement.

The survey found that:

  • More than a third of all survey participants are very or somewhat concerned that climate change will threaten their financial security in retirement. However, climate change wasn’t a top retirement concern for most survey respondents.
  • Compared to other generations, Millennials are more likely to believe climate change will impact their health, increase the likelihood of property damage, and influence where they’ll be able to live in retirement.
  • Half of all Millennials are concerned about the impact that climate change will have on their retirement security; only 16% of the Silent generation report the same concern.
  • All generations are concerned about how living expenses, taxes, and insurance costs will be negatively impacted by climate change.

Legitimate concerns about personal safety and increases in living expenses for heating and air conditioning, energy, home insurance, and food might influence some of your important retirement decisions. In fact, there can be many situations in which climate change could influence your retirement decision-making.

Let’s look at two.

Where to live in retirement

That idyllic retirement home at the beach or in the desert or mountains may not have the same appeal it might have had in the past. Heat, fires, or floods caused by climate change could wreak havoc on a retirement lifestyle in these settings.

When deciding where to live in retirement, you face two basic choices: the general area in which you want to reside, and the specific home and community you want to live in. Both choices can significantly impact your retirement finances and enjoyment of life.

To consider the potential impact of climate change on the general area where you might want to live, read the local newspapers, which can tell you about the current temperatures and stresses that climate change is causing in the area. Here are a few considerations:

  • Like the beach and a mild climate? Instead of living at the beach, you might consider living near the beach, preferably 25 feet or more above sea level to be safe from storm surges.
  • Like the mountains? Consider the fire danger: Would the roads accommodate an easy urgent evacuation?
  • Like the desert? Then you may want to investigate how to mitigate the impact of extreme temperatures.

If you decide that these areas might not be for you, you could end up choosing to live year-round in a metropolitan area that’s out of harm’s way from wildfires, flooding, and extreme temperatures and just vacationing at your favorite beach, mountain, or desert community.

If you’re retired and currently live in a location that’s susceptible to fires, floods, or excessive temperatures, you might want to consider moving to a safer location that’s more forgiving to older people who are vulnerable and with reduced mobility. Just don’t wait until you’re too frail and can’t manage such a move.

Regarding the specific home you’d like to live in, if you’re concerned about increasing insurance and utility bills, downsizing is a great way to reduce your bills for heating, air conditioning, and home insurance. Downsizing can provide other benefits, such as simplifying your life and freeing up assets you could invest for income. A bonus would be a location where you can walk to many of your daily activities or take public transportation.

Creative “investments”

In the current low-interest environment, instead of desperately chasing interest rates for paltry yields of fractions of a percent, you might want to broaden your perspective and consider investments that can reduce your living expenses. Examples include enhanced insulation of your walls and windows, or installing solar panels, water catchment systems, gray water systems, or drought tolerant plants.

Other possibilities include replacing a gas guzzling vehicle with an electric or hybrid car and replacing your lawn with a vegetable garden or fruit orchard or a drought-tolerant landscape.

No matter your age, hopefully you’re inspired to think of ways to protect your financial security and retirement from threats caused by climate change. And in the process, you’ll do your own part to reduce your impact on the environment.