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A majority of Americans are seriously concerned that their retirement will be negatively impacted by the rising costs and uncertainty associated with sudden, unexpected and more frequent extreme weather events taking place across the country. This is according to the 2024 Annual Retirement Study from Allianz Life Insurance Company of North America.
More than half of U.S. adults surveyed (56%) said they feel anxious about rising costs, financial losses and health-related impacts that extreme weather events could have on their futures. One in four respondents listed “risks of rising costs, loss of insurance or damages due to extreme weather or natural disasters as one of the top three risks to their retirement income,” the results explained.
Eighty-two percent of respondents also said that creating a financial plan designed to mitigate some of these concerns could help support the things they want to do in later life.
Climate-fueled concerns about retirement also varied wildly across generations and ethnicities, the results found.
“Millennials (70%) are more likely to have this worry than Gen Xers (53%) or boomers (32%),” the results explained. “More Hispanic respondents (66%) are anxious than Asian/Asian American (57%), Black/African American (50%) and white (55%) respondents.”
Lorinda Niemeyer, head of sustainability at Allianz Life, described the natural interactions between extreme weather events and financial anxiety, particularly in terms of how it could impact life in retirement — which for most Americans is reliant on a fixed income.
“As natural disasters become more frequent, more intense and more costly, Americans are waking up to how this could pose a risk to their retirement nest egg,” she said. “It’s not just the recovery costs after a disaster strikes. For many, extreme weather is increasing daily costs of living, insurance costs and other ongoing expenses. And those costs are tough to absorb if we don’t plan for them.”
But the overwhelming majority of respondents (82%) view financial planning as a path to blunt some of these impacts, which could be a positive sign overall, Niemeyer said.
“Extreme weather has the potential to erode wealth just like other risks to a retirement strategy like inflation and increasing medical costs,” she explained. “A financial professional can help create a holistic retirement strategy that addresses the financial costs and risks of extreme weather to help protect your financial well-being and overall lifestyle.”
Last year, a financial columnist and counselor at Business Insider expressed some of the ways that climate issues could directly affect retirement and homeownership plans.
“With ice caps melting and sea levels rising, the idea of buying a home when the weather can change dramatically and be extreme or unpredictable is ominous,” wrote Jackie Lam, an Accredited Financial Counselor.
“Let’s say I want to buy in an area that ends up being prone to coastal flooding, tumultuous storms, extreme heat, frequent and intense droughts, and wildfires. Would I need to move? Or if I wanted to stay put, how much would I have to spend modifying my home so that it could adjust to these shifts in weather?”
