Climate change, environment, income, retirement

Climate Change, Sea Level Rise and Retirement Risk

One of the oft repeated risks from climate change is the threat that comes from rising sea levels. Depending on the forecast, even in the most optimistic ones, seas are projected to rise several feet before the end of the century. With the accelerating build-up of CO2 and the rate of temperature increase (2016 being the hottest year on record), many expect dramatic sea level rise to occur much sooner than most expect. (https://www.co2.earth/ )

 

While people might want to buy shore property for benefits that include potential rental income, capital appreciation and personal use, they also face potential risks of hurricanes, sea level rise, etc. Some of these risks can be mitigated by purchasing flood insurance.

 

Last summer I explored the question, “if sea levels rise, what will be the impact on a clients’ net worth and portfolio?”

 

The answer is one few people are willing to confront.

I have asked many people who own real estate at the shore about their plans to deal with sea level rise. Their answers typically boil down to the fact that they don’t worry about it. “I am going to retire to the shore. Real estate on the shore has always been a safe bet. Why would it be different when I retire?” Living on the east coast, memories of super storm Sandy still resonate with many, but I think most see the storm as a one off event—not as part of a larger picture.

 

The fact is if sea levels rise only a few feet many homes at the shore and elsewhere will be at risk. Local businesses and infrastructure will also be impacted. The loss of such large assets will could be a financial drag to the retirement plans of many people; even the wealthiest would feel the impact.  ( http://sealevel.climatecentral.org/ )

 

Holding on to assets, like shore homes, that are at risk due to sea level rise is unacceptable in my opinion. Ignoring the changes taking place in the environment will not make the problem disappear.

 

But homes are not the only assets threatened by sea level rise. Local governments and businesses in coastal areas are at risk as well.

 

The lesson here is that the very definition of “risk” needs to be expanded in order for investors and retirees to accurately minimize their exposure to threats posed by a changing climate. How is the world changing? Which of my assets are at risk? What can I do to be financially secure 10, 20, even 5o years from today?

 

If you want to discuss these issues or learn more please feel free to contact me.

 

 

Retirement Income. Tax Efficient Planning.

Life Insurance. Disability Insurance

Socially Responsible Investing

 

To learn more contact:

James Cox

Ph: 610 293 8309

Email: james_cox@devon-financial.com

Devon Financial Partners 744 W Lancaster Av Suite 235 Wayne, PA 19087

 

This material contains the current opinions of the author but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice.

 

Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 7 Hanover Square, New York, NY 100034. 888-600-4667. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Devon Financial Partners, LLC is not an affiliate or subsidiary of PAS or Guardian. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.  2018-57337 exp 4/20