Time was when Chris and Kathy Perry, both 63, dreamed of retiring somewhere coastal. Maybe they’d relocate to Cape Cod, where they’d enjoyed many a family vacation. Or Maine, where their sons now live. “Being near water has always been important to us,” says Kathy Perry, a teacher in Katonah, N.Y. “We love kayaking, taking long beach walks.”
As their retirement has drawn closer, though, another concern has come into play: The rise of extreme weather events across the U.S. “Climate has become an extra cloud looming over our plans,” says Kathy.
Being able to afford the coastal home of their dreams, with the requisite insurance coverage, is one question. But what if their new home was hit by a catastrophic storm? What if they were unable to use vital medical equipment or access medication they might need in the future? “The idea of putting our assets into a property that could then be destroyed by a flood — that would put a serious dent in our retirement,” says Chris. “And the health risks we’d face being older are also scary.”
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Climate has always played a role in retirees’ plans, but typically in happier ways. It used to be that retirees could envision a certain quality of life in the warmth of the desert, deep in the woods or on the banks of a river.
The word climate has taken on a darker tinge. People may debate the science of global warming, but there’s no disputing that the number and severity of natural disasters continues to rise. Even locations that weren’t subject to hurricanes, floods, fires or extreme heat have become host to catastrophic events. And putting aside the dangers everyone is facing, studies now show that older adults are more at risk from these events than previously understood.
“Recent research has found that older adults are more vulnerable and experience more casualties after natural disasters compared to other age groups,” says Jennifer Pipa, vice president of disaster programs for the American Red Cross. Because older people tend to suffer cognitive and physical declines, as well as other chronic conditions, the need to help them prepare is even more critical, she notes.
The challenge for today’s retirees — and those headed toward retirement — is how to revisit certain assumptions and fortify long-term plans. While it’s impossible to predict where the next “thousand-year storm” will strike, understanding the relevant risk factors is essential, no matter where you live.
A new focus on resilience
Look no further than less than a year ago, when hurricanes Helene (in September) and Milton (October) plowed through the Southeast. The damage in Asheville, N.C., alone was devastating, partly because no one saw it coming to a place that was thought safe from extreme weather events. Record rainfall triggered flooding, mudslides and infrastructure damage on an epic scale — an estimated $60 billion and counting — and all in an area long cherished as an ideal destination for retirees.
“It’s definitely a paradox that Asheville has been marketed as a climate haven for so many years,” says Grace Barron-Martinez, a real estate agent with the Town and Mountain agency there. “People have flocked here to retire, believing it was safe. But as we’re seeing now, there isn’t any place that’s truly safe from these impacts.”
One way scientists are measuring the scale of these calamities is by the amount of damage they cause. Hence, the phrase “billion-dollar disaster” has entered the nomenclature. From 2020 to 2024, the U.S. suffered 23 billion-dollar disasters per year, on average, according to the NOAA National Centers for Environmental Information. There were 27 such events with losses over $1 billion in 2024 alone.
Compare that to the 1980s, when there were only about three events per year that exceeded $1 billion in damage, adjusted for inflation.
“If you look at a storm like Hurricane Helene and the utter devastation it caused, it's clear that our society isn't well adapted to the climate we currently have,” says Kristina Dahl, vice president for science at Climate Central, a scientific research organization that describes itself as a “policy-neutral nonprofit.” “I think there's a lot that we can do to improve the resilience of our communities given the types of extreme weather we’re seeing now.”
Physical vulnerabilities of being older
For retirees, preparing to recover from or avoid disasters should include more than housing and geographic considerations. One key factor is the scale of the over-65 population: In 2022, there were some 58 million people over age 65. That’s projected to grow to more than 78 million 15 years from now.
That is adding to the population density in retirement-friendly areas. And because many of those regions are more susceptible to natural disasters, this puts many older people directly in harm’s way.
Because they’re more likely to have mobility issues, chronic health conditions and to take medications, older people suffer more when disaster hits. Aging bodies also are more affected by dangerous weather. In extreme heat, for example, people over 60 are generally less able to regulate their own body temperature by sweating, which strains the cardiovascular system. Consequently, studies show, more than 80% of heat-related fatalities involve people over age 60.
During a fatal storm or other extreme conditions, risk factors for older adults can multiply. The inability to charge hearing aids can mean missing important alerts. Needing a walker or CPAP machine can hinder someone’s escape. In the Lahaina, Hawaii, wildfires of 2023, two-thirds of the fatalities were 60 and older. During the January wildfires in Los Angeles, all but two of the 30 people who died were over 60 or disabled; the average age was 77. Earlier this summer, a 10-day heatwave in Europe caused an estimated 2,300 deaths, with more than 80% estimated to be among those 65 and older.
Retirees moving to high-risk locations
Unfortunately, a corresponding factor has emerged that’s equally dire for retirees. Fires, floods, tornadoes and periods of extreme heat are not only happening more frequently — they tend to occur (and recur) in the regions where many older Americans live. The majority of counties in the state of Florida, for example, are considered very high or relatively high risk according to FEMA. And Florida’s population includes more than 4.7 million people over age 65.
Worse, despite the increase in natural disasters, signs are that retirees are not taking heed. Call it a triumph of hope over experience, or denial — some at-risk regions are seeing more retirees moving in, not out. For example, five states that are high-risk regions — Florida, Arizona, South Carolina, Texas and North Carolina — also saw the biggest net gain of people over 60 in 2023.
This data dovetails with what realtor Grace Barron-Martinez is seeing in Asheville. Despite the billions worth of damage wrought by last year’s hurricane, “Demand is still pretty strong,” she says. “What I’m seeing more is people paying closer attention to properties themselves. Like, the position of trees, drainage issues or how close the house is to a pond or a creek.”
Rather than viewing Asheville as risky, she says, retirees seem to be taking what happened in 2024 as a fluke, unlikely to recur soon. Or perhaps they’re willing to take on some risks in the name of a better quality of life.
“One of the first clients I met with after the hurricane was a couple looking to relocate from New Orleans,” Barron-Martinez says. “But they’d survived Katrina, so they weren’t particularly fazed.”
Why retirees may be more vulnerable
On top of these physical risk factors, there can be financial repercussions for living in a more vulnerable region. David Flegal, a financial adviser in Cleveland, notes that the cost-benefit analysis of moving into a desirable retirement area — often someplace warmer or coastal — is more complicated now. The demand for homes in these areas, particularly in today’s tight market, is driving up prices — and insurance rates have spiked in some areas as a result.
An analysis by the National Bureau of Economic Research found that homeowners’ insurance premiums rose by 30% from 2020 to 2023 (that’s 13% adjusted for inflation). “This growth is associated with a stronger relationship between premiums and local disaster risk,” the report says. Meanwhile, many insurance companies across the country have stopped renewing policies on homes they deem too risky. A 2024 investigation by the Senate Budget Committee found that the number of non-renewals tripled in some 200 counties.
Flegal has a client who bought a home in Tampa for about $600,000 some years ago. It’s now worth nearly $1.5 million, and the cost of fully insuring the home is now prohibitive. Moving would be painful. “They like where they live, and it feels like home,” Flegal says.
They’d also take a financial hit. Even with the additional cash from the sale of their current property, finding another home could be challenging. Then there’s the tax on the gain from the sale: a likely 15% in long-term capital gains. Flegal notes that the capital gains exclusion for married couples on the sale of a primary residence is $500,000. In this case, even the $500,000 exclusion could leave his client with a $400,000 taxable gain.
The bottom line? “For now, he’s now living in a partially insured home on the Gulf Coast,” Flegal says.
A walk on the financial side
Practically speaking, is it worth factoring in climate- or weather-related risks as part of your retirement? After all, every retiree faces plenty of potential hiccups in the road ahead. Risks include prolonged or chronic illness, losing a spouse through death or divorce, an adult child or grandchild needing financial assistance, and outliving your assets. Not everything can be a line item in the budget.
Jen Mulder, the founder of Pathway Financial Services in Los Angeles, maintains that climate risks need to be part of a long-term financial plan. Thanks to the wildfires that ravaged Southern California last January, clients are more receptive to that conversation. “The wildfires were a wakeup call for a lot of people,” she says.
Still, Mulder says some clients are surprised when she tries to connect the dots to the financial side of their plan. “People don’t realize that certain factors could change — like taxes or inflation — because of these events. Businesses themselves may have more costs, or even liability issues that could impact returns.”
The resilient retiree
Lisa Hillegas, 62, is among those who want to cultivate resilience. In that sense, she’s emblematic of the next generation of retirees who are well aware of the increase in natural disasters and are factoring in those risks.
A lawyer in Ukiah, Calif., Hillegas and her husband moved into the house they hoped would be their forever home in late 2019, just before the pandemic. “We knew there was a fire danger up here,” she says, but they weren’t prepared to be affected by fires hundreds of miles away from their home just two hours north of San Francisco. The record-breaking wildfires in 2020 and 2021 burned millions of acres, generating so much smoke it made life unbearable. Going outside was impossible, and indoors wasn’t much better, Hillegas recalls. “We had air filters in every room. My husband was walking around with one of those filtration masks inside the house. It went on for weeks.”
Not only were all their outdoor activities off limits, Hillegas became deeply worried about the health risks of inhaling toxic pollutants. From her days practicing environmental law, Hillegas was sensitive to the risks of being exposed to chemicals. “With a wildfire, you just don’t know what’s burning — it’s not just trees, it’s appliances, cars, furniture. You're inhaling particles as well as smoke, and we don’t really know what the long-term health impacts are.”
Hillegas and her husband have reluctantly decided to leave California, and they’re now weighing a number of personal, health, climate and financial issues. They’ve considered Maine and Rhode Island — where they have friends or family — but that would put them on the opposite coast from their kids and her husband’s parents.
Making these choices — weighing the cost of living as well as quality of life — has never been an easy calculus. But the threat of natural disasters adds a new layer of complexity. “I consider myself a pragmatist,” Hillegas says. “I want to give myself the best shot at a long and satisfying retirement with my husband. Living in a place where we can’t breathe the air safely for weeks at a time is not the environment I want to grow old in.”
“Now we’re in the process of exploring Portland, Ore.,” she says. “It feels more palatable, because we’re still on the West Coast, and it’s a good city for aging in place.” But, she’s quick to point out, Portland has suffered episodes of extreme heat, as well as wildfires in 2020, albeit far less severe than in California. “All we can do is control what we can. There’s nowhere that’s 100% safe.”
Can you disaster-proof your financial plan?
Gaming out scenarios to come up with different portfolio projections is standard practice in the field of financial planning. Jen Mulder of Pathway Financial Services in Los Angeles has a few additions to that process that she uses to help clients consider the possible impact of different climate- and weather-related events.
Rethink the numbers. If the number of “billion-dollar disasters” continues at its current pace, governments and large companies could be contending with higher costs and bigger outlays. It’s worth running projections that factor in potentially lower returns as well as higher rates of inflation, Mulder says. “Depending on the outcomes, you may want to save more or think about working longer. The point is to give yourself options.”
Consider a Roth conversion. Could tax rates increase, given the burden on the government to help states recover from storms and other events? It’s hard to predict, “but if you believe you could be paying higher taxes down the road, it might be worth doing a Roth conversion on some of your tax-deferred assets now,” Mulder says.
Obviously, doing a rollover from a tax-deferred account like an IRA or 401(k) into a Roth account means you’ll owe tax on that amount at your current rate. But because there are no restrictions on the number of Roth conversions you can do (and no income cap when using this strategy, either), you could roll over a series of smaller amounts over a few years, pay less in tax — and enjoy tax-free withdrawals (once you’ve had the assets in the account for at least five years).
Invest in social capital. Given how vulnerable older people are in any kind of crisis, but especially in a deadly storm or fast-moving wildfire, knowing your neighbors could provide a critical lifeline, Mulder says. While this is true for many retirees, those who relocate need to be proactive about nurturing their social networks: “Let friends and neighbors know if you have hearing issues and might not hear an alarm or warning, or if you have mobility issues and need help getting out of your house.”
Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.
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