Photo by Simon Hurry on Unsplash

…and you thought the climate crisis wasn’t going to affect you.

Imagine this: You have saved for your retirement and plan to move to a place that is lovely and warm, easy to get around, and exciting to be. You sell your home, downsize, and buy a home for cash. You’ve done well enough. You bought a $600,000 home and — no mortgage! Congratulations!

And then, it’s value tanks. It drops by 70 or 80%.

You can’t sell it.

And you can’t live there.

What happened?

This scenario unfolded because your new community couldn’t get water. The Colorado River is too dry. You don’t have rights. The neighboring town will not truck it to yours.

Welcome to the water wars.

As I have written previously, the climate crisis is already here and it is not measured in degrees Celsius. The problem is people and how they are going to react to the real impact of the already changing climate. The southwest of the United States is already suffering its worst drought on record, and water levels are so low in the reservoirs behind the dams, that the hydroelectric dams may need to be turned off. More importantly, there may not be water for the people.

One example, according to this article, is Rio Verde Foothills, a small community outside of Scottsdale. Its water is trucked in from Scottsdale, but because water usage is being curtailed by the federal government all the way along the Colorado River, Scottsdale can no longer provide water to Rio Verde Foothills. If you just purchased a home there, you could be in exactly the situation I outlined above. Your new home has no water. You can’t get any. You can’t live there, and you can’t sell the home.

As a retiree, this is a disaster. It doesn’t matter if you “believe” in climate change or not. You just lost an enormous part of your nest egg — maybe all of it. You probably cannot buy another house. Your social security would barely cover rent anywhere else. What are you going to do?

This is why climate must be calculated into your retirement plans. The risks are hidden and local, and therefore hard to find and understand for the newcomer retiree, but they are enormous. Before you invest in real estate, learn about these risks and make sure you have a margin of safety in case the worst outcomes occur.

For more of my articles on retirement and financial planning, click here.

You can find my newsletter Intertwine: Living Better in a Worsening World here.

Anthony Signorelli

Ideas, insights, and imagination to help you live better in a worsening world. Topics include Men, #MeToo, and Masculinity; Postcapitalism; Climate Change; Digitalization and Cryptocurrency; Green Energy; Retirement and financial planning… basically everything that addresses making life better in this challenging time of history.

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