Americans Worry Extreme Weather Will Rain on Their Retirement

Allianz Life study finds few have a plan in place to address the rising costs of extreme weather

KEY FINDINGS:

• 56% say they have anxiety about rising costs, financial losses, or even health effects from extreme weather events or natural disasters
• 25% ranked risks of rising costs, loss of insurance, or damages due to extreme weather or natural disasters as one of the top three risks to their retirement income
• 82% say creating a plan to mitigate or cover financial implication of external events such as extreme weather or natural disasters would help ensure that they could financially support all the things they want to do in life

The majority of American are anxious about the effect extreme weather could have on their financial future yet few are talking about it with a financial professional, according to the 2024 Annual Retirement Study* from Allianz Life Insurance Company of North America (Allianz Life).

More than half (56%) of Americans say they have anxiety about rising costs, financial losses, or even health effects from extreme weather events or natural disasters. Millennials (70%) are more likely to have this worry than Gen Xers (53%) or boomers (32%). More Hispanic respondents (66%) are anxious than Asian/Asian American (57%), Black/African American (50%) and white (55%) respondents.

“We see extreme weather almost daily in the news,” says Lorinda Niemeyer, head of sustainability, Allianz Life. “As natural disasters become more frequent, more intense and more costly, Americans are waking up to how this could pose a risk to their retirement nest egg. It’s not just the recovery costs after a disaster strikes. For many, extreme weather is increasing daily costs of living, insurance costs and other ongoing expenses. And those costs are tough to absorb if we don’t plan for them.”

One in four Americans (25%) ranked risks of rising costs, loss of insurance, or damages due to extreme weather or natural disasters as one of the top three risks to their retirement income. This was the same or higher than same or higher than concerns like taxes, debt, or caregiving responsibilities. Yet, just 10% who have concerns about extreme weather have discussed it with a financial professional.

At the same time, 82% say creating a plan to mitigate or cover financial implication of external events such as extreme weather or natural disasters would help ensure that they could financially support all the things they want to do in life.

“Extreme weather has the potential to erode wealth just like other risks to a retirement strategy like inflation and increasing medical costs,” Niemeyer says. “A financial professional can help create a holistic retirement strategy that addresses the financial costs and risks of extreme weather to help protect your financial well-being and overall lifestyle.”

Lessons learned

Americans who have been financially impacted by extreme weather are more likely to have a written financial plan and strategy to protect themselves from risks in the future. Nearly half of Americans (48%) who have not been financially impacted by extreme weather do not have a written financial plan. Meanwhile, just 14% of those who have experienced extreme weather said the same. This group is making plans to protect themselves against this risk in the future. More than one in three (36%) of those who have been financially impacted by extreme weather say they have included the potential implications of extreme weather or natural disasters into their financial retirement plan. Just 12% who have not experienced this said the same.

“Americans who have experienced extreme weather and its effect on their finances have learned a hard lesson and now want to make sure they are financially prepared for another natural disaster to strike and protect themselves against this risk in the future,” says Niemeyer. “This can serve as an important lesson for others, too.”

*Allianz Life conducted the 2024 Annual Retirement Study online survey in February and March 2024 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k+. The study included an oversample of respondents who identified as Black/African American (416 responses); Hispanic (398 responses); Asian/Asian American (366 responses).

Guarantees are backed solely by the financial strength and claims-paying ability of the issuing insurance company. Variable annuity guarantees do not apply to the performance of the variable subaccount(s), which will fluctuate with market conditions.

Products are issued by Allianz Life Insurance Company of North America. Registered index-linked annuities are distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. 800.542.5427 www.allianzlife.com This content does not apply in the state of New York.

About Allianz Life Insurance Company of North America

Allianz Life Insurance Company of North America, one of the Ethisphere World’s Most Ethical Companies®, has been trusted since 1896 to help millions of Americans prepare for financial uncertainties and retirement with a variety of innovative risk management solutions. In 2023, Allianz Life provided additional value to its policyholders via distributions of more than $13.73 billion. Allianz Life is a leading provider of fixed index annuities, registered index-linked annuities, and fixed index universal life insurance. Additionally, Allianz Investment Management LLC (AllianzIM), a registered investment advisor and wholly owned subsidiary of Allianz Life, offers a suite of exchange-traded funds (ETFs). Allianz Life and AllianzIM are part of Allianz SE, a global leader in the financial services industry with approximately 157,000 employees in more than 70 countries. Allianz Life is a proud sponsor of Allianz Field® in St. Paul, Minnesota, home of Major League Soccer’s Minnesota United.

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