Climate change could be bad news for your retirement plans

Climate change could be bad news for your retirement plans

By Georgina Wade

A survey released just last month by Natixis Investment Managers paints a grim picture for people hoping for an old age free of financial stress. An accompanying report on the impact of global warming making the findings even worse.

Taken together, the studies suggest that retirees are at risk, due to a trifecta of issues resulting from foreseeable low interest rates, longer lifespans and the high costs of climate change.

Low interest rates may stimulate borrowing, but they also present a significant hurdle for those saving for retirement and those looking to generate income. Additionally, rapidly aging populations and longevity can result in an unbalanced old-age dependency ratio: the ratio of people over the age of 65 to the working-age population, age 15-65. This may be most important for Generation Z, with UN projections showing that by 2065, retirees should plan for living another 24 years in retirement.

Amongst these, a long-term risk to global sustainability presents an immediate financial risk today. While the risk of climate change is often viewed through a long-term lens, today it presents tangible health and financial risks to millions of retirees that will challenge policy makers round the world.

The World Health Organization (WHO) projects that climate change is expected to cause 250,000 additional deaths per year between 2030 and 2050, while the U.S. Environmental Protection Agency (EPA) reports that extreme heat has increased the risk of illness among older adults, especially those with chronic illness. Adding to that, Natixis report states that “retirees are finding insurance costs escalating as insurers seek to keep pace with climate and weather-related property damage.”

[Get more insight into these key threats, as well as detail on the how and why of country rankings. Download the full report here.


Cover photo by James Jose Jr. on Unsplash.

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