Retirees Beware — How Climate Change Could Destroy Your Nest Egg
And how to lower the risk
We all saw what Hurricane Ian did to Florida. Many, like me, thought: “Wow, what a hit the insurance companies are going to take! All that damage, all that rebuild, all those incredibly high costs of reconstruction.”
Except for one thing — the insurance companies are not taking the hit. They are paying for nothing. If you owned a home in the flooded area, you are screwed.
Here’s why: Homeowner’s insurance does not cover floods. For that, you need flood insurance — or, a really, REALLY well-planned town to live in, like Babcock Ranch near Fort Myers. People there did not need flood insurance because nothing flooded. They did not lose everything. They won’t have big repair bills. What saved them? The planning for Babcock Ranch.
This town generates all of its electricity from solar arrays that it owns. The streets are designed to drain water away from homes and buildings, thereby preventing flooding. Power and internet lines are buried to prevent wind damage. In other words, it was built as a city that knew it would get hit by something like Ian. It simply planned for it. And the beneficiaries of all that planning were none other than the residents. This is the kind of planning you want if you are moving your home south for retirement.
And that’s the point: Retirees should be looking deeper into the communities where they are buying, and we should be considering climate change and the local government’s way of preparing and handling its effects. This is not some “feel-good” green new deal I am talking about. No. It is about protecting your assets and hard-earned nest egg. It is about sustaining yourself through the effects of climate change with good planning and thoughtful personal strategy. And it is about local towns using local resources to meet the localized effects of climate change.
Every area has its challenges, and the question we should ask is how the local government is set up to prevent the worst effects on residents. What have they done to make their towns resilient? Florida has hurricanes. People can pretend it only happens once in a while and ignore it, or they can prepare. Fort Myers pretended whereas Babcock Ranch did not. In the southwest US, the issue is water. Cities can build and build pretending there is no problem, or they can build to handle the problem. Which city do you think would be a better investment? In California the problem is fires. In Missouri it is tornadoes. Everyone is being affected.
So when you look for a retirement place to live, the weather isn’t the only consideration. You need to make sure your investment is being protected, too. Here’s how I am beginning to think about risk in finding the place I want to live:
Are power lines on poles or buried? Buried lines provide extensive resilience to wind storms.
Is there a weather-reinforced, local source of electricity?
Is that local source a non-burning source (like solar, wind, etc.)?
Is the electric source backed up by the grid just in case?
Is the town designed to resist the biggest local risks, whether they be hurricanes, flooding, fires, drought, or any other effect of climate change?
Is insurance available, affordable, and forever renewable?
If I can cover these bases with my real estate investment, it may make it more likely that I can protect that nest egg. The problem, of course, is that there aren’t many communities like Babcock Ridge yet. Areas that bury power lines or plan for floods often are dealing with only one problem or part of a problem. What’s unique about Babcock Ridge is that it undertook to handle all the problems Florida’s hurricane reality presents — power, water, flooding, wind, and so on. Comprehensive planning makes the difference. As a consumer, I will be looking for that kind of forethought. As an advocate, I am encouraging all cities and towns to take a similar approach. It will not only help solve climate change; it will also help us survive it.
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