Move Over Florida. Retirees Are Making New Plans As Climate Change Raises Costs

Beth McCormack recently called off her search to buy a home in Florida. The Chicago attorney decided that prices were too high, especially given the expensive homeowner’s insurance she would need to buy. Instead, McCormack, 60, decided to rent a place for the winter. She is one of many pre-retirees and retirees who are recalibrating their plans as climate change intensifies natural disasters and increases the cost of living in many desirable locales.

While plenty of older adults are still flocking to warmer climates, a study last year by the Federal Reserve Bank of San Francisco suggests that Americans’ decades-long migration to the Sun Belt is slowing, with the change most pronounced among young and older adults, those from 20 to 29 and from 60 to 69.

Some are pulling up stakes altogether, moving out of regions that have seen more hurricanes or wildfires. Nearly 14% of house hunters ages 18 to 65 cited concerns about natural disasters or climate risks in their area as a reason they are likely to move in the next year, according to a Redfin poll late last year.

In a changing environment, flexibility is key. If you want to commit to a disaster-prone area, test the waters before you do. McCormack is keeping one eye on the real estate market but says prices would have to fall considerably for her to consider a purchase.

Online tools can help you gauge how an area’s risk will change over time. Climate Central, for example, has a tool that models coastal risk into the future. Mounting exposure could boost living costs and lower property values.

Few places are immune. The Pacific Northwest had been considered a climate haven, but the wildfires that ravaged Oregon last year likely changed that perception. States that are relatively insulated, such as Minnesota and Michigan, often involve the trade-off of cold winters.

Future climate risks generally aren’t priced into the housing market yet, says Kristina Dahl, vice president for science at Climate Central, a nonprofit organization that researches and reports on climate issues. If that changes, lower property prices could lessen the value of the inheritance retirees were planning on leaving their heirs—or the asset they were counting on to fund their own long-term care.

Some retirees ultimately decide that the risks aren’t worth it. Elizabeth Scheiderer, a certified financial planner and principal at Signal Tree Financial Partners in Copley, Ohio, has a client who is leaving Siesta Key, Fla., due to the cost of homeowner’s insurance and the frequent evacuations. “It’s not how they want to spend their their retirement years or their retirement savings,” she says.