Hurricane Ian reminds us that the question of how to best prepare for the risks of where we live in retirement is even more important than planning for how much retirement will cost.
Planning and living in retirement requires anticipating and managing risk. Markets rise and fall requiring us to adjust investment strategies, spending habits – or both. Chronic health conditions developed over decades can threaten personal health, and the wellbeing of loved ones, but the impacts may be managed with healthy behaviors and early intervention.
Few of us, however, think of our choice of where to live in retirement as a calculated risk. Despite the popular imagery of retirement as a life stage filled with bike rides, beach walks, golf greens, and even pickle ball, Hurricane Ian smashing into Florida’s Gulf Coast reminds everyone that choosing where to live in retirement includes anticipating the multidimensional risks of extreme weather and other natural events that everyone faces in every region.
Here are just three risk factors to consider:
Natural Disasters and Financial Risks
Living where major climate events are common requires additional financial planning. Repairing or replacing a home after a major event is a significant shock to any retirement portfolio. How many of us have a rainy day fund, that is really for a rainy day? For example, temporary relocation costs, transportation, hotel, home rental, etc., resulting from an hurricane evacuation order or from a collapsed snow laden roof.
Insurance costs may increase after a significant storm or wildfire. Changing weather patterns, or rezoning of flood and fire zones, may dramatically increase insurance costs. In some regions securing adequate insurance may be difficult or even impossible after a major event or series of events. Moreover, everything may not be covered by insurance. For example, wind damage is often part of home owner’s coverage, but water damage from flooding may not be included. Over time, increased public attention and concern to weather changes may impact home value, threatens precious equity, and ultimately reduces the wealth that may be transferred to adult children.
Evaluate Your Retirement Community’s Readiness Risk
Whether choosing to age-in-place, move to somewhere new, relocate to a retirement community, or to move into senior housing, assessing the community’s capacity to respond is critical. While many choose retirement locations based upon fond memories or amenities, retirement planning might also include understanding how prepared your chosen community is to respond to the unique needs of older adults. Do police, fire, emergency medical services, hospitals, transportation providers and senior housing staff have sufficient capacity to meet the challenges of older people with medical, mobility, or cognitive impairments? For example, some communities have shelters designed to accommodate older people with mobility and medical complications — does yours?
Consider A Retirement Location That Adapts To Your Personal Health Conditions
Few of us accurately assess our own wellbeing or physical capacity. Aging by definition is about change, but we cope, and often ignore, or rationalize, declines in function. For example, how many of us recall when we first started wearing glasses? Despite age and health-related changes that may impair our capacity to prepare or evacuate from a disaster we are more likely to think “I have managed storms before, I will muddle through this one too.”
Often those changes result in people being less resilient and less likely to survive a catastrophic event. Historically, older adults are overwhelmingly the majority of fatalities in natural disasters. Navigating what to do and how to make a fast safe exit is difficult for anyone, but even more problematic for those managing mild to significant mobility or cognitive impairment.
Chronic health conditions accumulated over the years may require special devices, medications, regular treatments, e.g., oxygen, dialysis — all at risk when the power goes out or transportation becomes impossible. Cognitive function becomes even more critical when all the systems and the coping strategies we use are no longer available, e.g., neighbors are unable to help, phoning an adult daughter is impossible, power failure shuts off the elevator, heat, or air conditioning. Moreover, older adults, particularly older women, are more likely to live alone. When communications and transportation systems fail, who checks in on her to be sure she is safe?
While Hurricane Ian’s wrath on the people of Florida is in the news today, catastrophic weather and other natural events are not limited to the south. Note the impact of Hurricane Fiona on the Canadian Maritimes. Natural disasters occur everywhere. Snow and ice storms, with names like bombogenesis and bomb cyclones, visit those aging-in-place in the northeast. Midwesterners experience heat waves and tornados. And, wildfires and mudslides often threaten those living in the west.
Retirement planning can’t control the weather. However, critically and realistically assessing our personal resilience and how to best prepare for the possible risks of where I live, is a critical element to thinking about how I will live in older age.
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