MT16 | Climate-Proof Your Retirement

Unpredictable climactic events have been occurring with increasing frequency as well as intensity and it’s no longer just animals or insects or forests getting decimated. This time it’s personal. The change is literally at our doorsteps in the form of wildfires, record-high temperatures, flash floods, and droughts. What used to be something we thought was a hundred years away is now being measured in decades. In our lifetime. And so, weirdly and very unfortunately, it has suddenly become critical to factor in climate change when laying out your retirement plan. How should we begin?

Discussion Topics: Climate-Proof Your Retirement

• Definitions of retirement differ, but the location is a central theme in all definitions
• Your location of choice needs to factor in climate change, self-sufficiency and potential outcomes 100 years out, to the end of your children’s lifetimes
• More people who can afford it will choose or at least attempt to relocate to countries with a climate-positive future, so consider that as part of your plans
• Finally, factor in the community – how in your climate-sheltered cocoon do you interact with society, especially your near and dear ones

Transcript: Climate-Proof Your Retirement

Hi there. We are Amit and Neha. We’ve each spent a couple of decades earning, saving, and investing our way to financial freedom. In this show, we share everything we’ve learned on our financial journey, so you too can build wealth, stop chasing a paycheck and start chasing your dreams instead

Regular listeners would know that most episodes of MoneyTok come with a free tool or template that you can use to accelerate your own financial journey. Today is no different. Click on the link in the episode notes or head on over to CrazyTok Media Resource to get a handy checklist to help you figure out the most climate-friendly retirement location for you.

Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own experience. I’ve been doing this for about 20 years now. This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, and so many kinds of things.

So Amit, what comes to your mind when you think of retirement?

I think the earlier concept of retirement was that you work till you’re 65 and then spend the rest of your life taking it easy at home. But I think that concept is changing now. At least speaking for my wife and myself, we expect to remain occupied pursuing projects we are passionate about. This means we might base ourselves somewhere away from the noise and bustle of big cities but close enough so that we can remain economically productive and be able to travel the world conveniently. What about you? The same?

For me, it would be the freedom, at any stage of my life to be able to anchor myself and derive creative and social fulfillment. Not necessarily when I am a geriatric.

Yes, looks like we both agree that retirement is no longer about being old and unproductive. I define it mostly around financial independence. In other words, enough savings that you can live a reasonably comfortable life. Even if not a lavish one. Which includes investment savings and a fully-paid off house.

Well, money is not all of it. You need fitness and skills to keep you engaged and a community for social engagement.

True

This used to be easy earlier. Just settle down where your friends and family are. However, the factors governing how you scope your retirement nest or save for your safety net and the kind of skills that will be required in a few decades are all changing dramatically with climate change. So Amit, how are you thinking this through?

Wow, that’s a big topic. Where do I start?

OK maybe for today let’s just talk about where you want to settle down. How do you decide what’s the right location?

Ahh yeah, we’ve had lots of ideas, but they’re all getting knocked out based on climate change criteria. For example, I love being near water, but beach and coastal properties are out because of rising sea levels and anything too close to a river has the risk of flooding. And my second preference, forested areas, might be prone to wildfires.

Clearly finding a retirement destination is no longer a simple job.

Definitely. Because most of us have to plan for decades in the future. And if you factor in your kids’ lifetimes then we’re probably looking 100 years out. So you have to start accounting for how climate change is reshaping landscapes, and changing habitable zones. For example, did you know that a whole band of the area between the tropic of Cancer and Capricorn will become too hot in the next few decades? Ironically that’s also the band that currently holds the bulk of the world population.

The rising temperature trend is evident, with cities that earlier did not require even fans in summer, like Seattle or Shimla, requiring ACs now. So what seems too cold now, like say northern Canada may actually become temperate in some time. This means that, when zeroing in on an area for your future retirement heaven, we can’t focus on how good it looks now. Rather we need to extrapolate how resilient it might be to the apocalyptic climate in the future, and how relevant it will be in the great human migration that climate change will trigger.

Then you also have to consider the scenario of self-sufficiency. Yes! And this is where I start sounding like complete doomsayers, like those guys with guns hiding out in bunkers. But we can already see that climate change is changing growing patterns for crops. And Covid has shown us how dependent we are on global supply chains. So it is totally plausible that in extreme climate events food supply chains would get disrupted, or there is an outright shortage of food or even water. So it is important to try and find self-sufficient patches of land where you can set up sustenance farming and water harvesting. And by this, I don’t mean for you to take control of acres of land. Just enough for a family to get by, or maybe a group of families on a collective.

And then there’s the question of medical care. Try as I might, I seem to be getting older. Which means more doctor visits, diagnostics, and procedures. I think medical sciences are advancing so much that in a  few years, even health care could be done remotely. Already we all wear some kind of fitness band which is recording our vitals. It is not farfetched to imagine a future where your band will be connected to a hospital or a doctor, and by reading real-time data on your health, it will be able to prescribe and dispense the required medication. And maybe bots will be able to fly on drones to reach remote locations and perform surgery too. So I am not really looking at cities or physical proximity to a hospital as an anchor. Ummm I am. I want to be near a hospital. Even if we have drones. No matter how cool that would be. In fact, Covid has sort of stalled if not reversed the whole urbanization surge. With the advent of digital nomads and work-from-home, it is no longer necessary to be trapped in an urban jungle, and lots of people are looking to move out of crowded cities.

Actually, if I may Neha, this whole discussion is not limited to your current country of residence or citizenship. I know immigration is becoming harder and the world is becoming more inward-looking, less global. But there are still pathways to residency in other countries. So people with the right mix of skills and financial strength could choose to emigrate to some of these places in order to better hedge against climate events – and in fact even to reduce their cost of living or get better access to healthcare. Canada has a fast track for skilled people to fill the gaps in their working population. But again, you have to keep in mind the taxation, health care facilities, and support for the older population. Portugal and India are sprouting an entire industry of affordable retirement housing.

A country like Singapore on the other hand is very clear in its stance that there are no freebies from the state and that every able-bodied person regardless of age needs to earn their living. There are also some other countries where because of the lower cost of living, the size of your retirement nest doesn’t have to be too large. A bigger country will have a more varied landscape and probably a higher ability to afford mobility during climate disasters. Australia already has climate refugees. Inhabitants from the Pacific islands whose homes have literally disappeared underwater have been allowed residency in the country.

Another important factor is the governance and stability of the country. First of all, is it safe, affordable, and welcoming to outsiders? And if those are true, is it on a dangerous path towards climate disaster, or is it starting to put policy measures to future-proof society? Nordic countries for example already put major emphasis on recycling, reducing carbon emissions, and moving away from non-renewable energy so you get to be in clean, green surroundings and breathe clean air. As a retiree, I would love an environment like that. So, if you see yourself living elsewhere in the future, do consider these factors and start researching the requirement for your favored destinations.

For me, community is also a factor to consider when deciding on your retirement property. While you can outsource everything like household chores, or even medical care to AI and the machines, what you cannot replace is a sense of community. The pandemic has been a stark reminder of how communities nourish us, and when a person is left alone, it can really impact one’s mental health. And whatever is in store in an uncertain future of cataclysmic events, you are better off facing it in a group than alone.

Agree completely, Neha. What fun is it to live in an ecological wonderland if you have nobody to share it with?

That’s why so many of our friends talk about buying land in a common location, so we can all be close to each other. Also, because I believe in productive retirement, I think you should still want to be somewhere close to an economic and transport hub so you can easily plug into the action when you need. This is already highlighted in the sprouting of shared workplaces, the idea being that the creative energy of a communal workspace is better than being holed up alone and talking to a wall. So depending on the kind of retirement you are aiming for, you may choose to be in a forest with a group of friends or in a creative hub with co-collaborators.

So talk to your friends, who are like-minded. Think of the retirement home not just for yourself and your partner, but maybe as your own little village for a group of people who can look out for each other, and nourish one another. It also makes sustenance living or ideation that much easier as a concept to implement.

So to wrap up today’s episode, when you’re thinking about a retirement location make sure it’s in a climate-friendly place and allows for sustenance farming and water sources for your family and friends. For this, you can use our linked checklist. Consider also whether you can be part of a community or at least near a hub of economic and creative activity. Factor in healthcare. And if your current location doesn’t fit the bill, there might be other places in the world that would be happy to have you.

With that, we’ve reached the end of today’s episode. Thanks for joining us today.

We are Neha and Amit, with MoneyTok. See you next time