Icicles hang on State Highway 195 sign in Killeen, Texas on February 18, 2021.

Joe Raedle | Getty Images

The threat of climate change is changing the retirement plans of some older Americans.

Extreme weather such as cyclones, floods, freezing temperatures, and forest fires have made some think about where they will spend their golden years.

“Customers are seeing it for themselves and as a result are starting to adjust their plans,” said John McGlothlin III, a certified financial planner with Southwest Retirement Consultants in Austin, Texas.

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A customer looking to retire in Galveston, Texas, was not prepared for the rising cost of flood insurance, he said. While the average cost of flood insurance in Texas is $ 700 per year, the premiums may be higher in some areas.

Another Austin customer suffered from freezing frost and power outages in the area in February. When pipes froze and their condo flooded, they began to question their long-term plans, McGlothlin said.

With the possibility of another cold snap, further home damage, or future displacement, they are rethinking where they live. But there is one problem: the unit cannot fetch the same price after the flood, he said.

However, falling property values ​​can pose another problem for retirees.

With less home equity, retirees may have limited flexibility to use their property to pay for long-term care or other healthcare expenses, McGlothlin said.

“We just have to think very carefully about what the environment is doing to real estate and what that means for long-term retirement plans,” he said.

No problem for all retirees

While some retirees are concerned about the risks of hurricanes, frost or forest fires, others are less concerned about climate change.

“From what I’ve seen over the past five to ten years, extreme weather didn’t have a noticeable impact on retirement plans,” said Matt Stephens, a Wilmington, North Carolina-based CFP and founder of AdvicePoint.

Although the Wilmington coastal region has been hit by hurricanes and floods, it’s still a popular spot for retirees, especially along the water, he said.

“People want these qualities,” said Stephens.

When choosing a retirement location, many customers want proximity to family, scenic areas, mild weather, and a reliable hospital system, he added.

Additional insurance costs

Whether retirees stay or leave, they can face rising home insurance costs in some areas.

In North Carolina, those living east of Interstate 95 must get separate wind and hail insurance in addition to their home insurance, Stephens said.

The average cost of wind and hail insurance in North Carolina can be nearly $ 1,700, reports The Zebra.

“Wind and hail insurance has grown steadily over the years,” he said.

Additionally, those who live near the water may need flood insurance and spend an average of $ 739 more per year in North Carolina, according to ValuePenguin.

And it can be difficult to find cover for some types of natural disasters. For example, those who live in locations prone to forest fires may struggle to find affordable insurance.

“If you have a house in the Rockies, either you’ll have a really hard time finding insurance or you’ll pay a lot for it,” said McGlothlin.