Disaster Planning: What Would a Natural Disaster Do to Your Southern Retirement?
Over the last few years, it seems natural disasters are happening at an unnatural pace. Hurricanes, tornadoes, flash floods, severe storms, wildfires, landslides … the list goes on. Folks in Houston, Atlanta, Alabama and throughout the South need to plan for potential natural disasters and the possible effect on their lives and their retirement.
In our 50 years of experience helping families plan for retirement, the financial advisors at Linscomb & Williams have seen firsthand how an unforeseen disaster can devastate a family’s finances. The result can be even more damaging for a retiree who is living on a fixed income.
We don’t want to create unnecessary anxiety, but it is important to be aware of what could happen. Natural disasters can be especially surprising for retirees who relocated and are unaware of local threats, like the tornadoes, hurricanes and floods that Texas, Georgia and Alabama can experience.
Preparing for the what-ifs life may have in store is an important part of retirement planning.
To help lessen some of the stress that can come with these unexpected events, the team at Linscomb & Williams has put together the following 6 tips to consider.
Identify Potential Disasters in Your Area
First and foremost, identify which potential natural disasters may threaten your area in the future. In Texas, Hurricane Harvey hit Houston hard a few years ago. It's only a matter of time until Houston experiences another hurricane. Review the history of extreme weather events in your region so you’re aware of what might occur in the future.
Second, think about what can happen in the aftermath of these events. Could your home or place of business be physically destroyed? What if you weren’t able to return home or to work until repairs are made?
Third, make a plan for the unexpected. Do you have an emergency fund? Is your estate plan up-to-date? Do you have the right insurance in place? Having a conversation ahead of time can take away one less stress when there are so many other things to worry about (family, safety, communication).
Talk to Your Financial Advisor About Insurance
Insurance is a crucial part of a comprehensive financial plan. Insurance can protect you from loss of your physical assets. Your health is protected via health insurance. You can help protect your dependents through life insurance.
Don’t assume that the insurance you currently carry will always protect you in the event of a natural disaster, however. For example, typically, a homeowner's insurance policy does not cover you in the event of flooding, so you may also need a policy for flood insurance. Talk with your financial advisor about your situation and what insurance you may need. It can help to create a comprehensive list of your assets before the meeting. Perform a detailed survey of your home, itemizing all of its contents. Do you or any family members keep collectibles or jewelry outside the home? Do you have a second home, a boat moored on a lake, a recreational vehicle? Be sure to include everything.
Keep a Master List of Your Accounts/Important Information in a Safe Place
When a natural disaster hits, there are a million things to think about. You won't want the scramble to get organized financially to be added to the list.
At Linscomb & Williams, we encourage clients to create a master list of all their accounts and important information, and keep it in a safe place, either online, in a physical safe, or both!
Include all accounts (checking, savings, investment, retirement, etc.). Include information such as the account numbers, passwords (encrypted if digital), co-signers if they are held jointly, and e-mails and other contact information. Then share this list with a trusted relative or friend in another geographical region. If you’re unable to access your files because of evacuation orders, accessibility issues or repairs needed on your home, this will ensure someone else can! You may need to call your financial advisor, for example, to see if you have enough to cover repairs, so it’s important that you know how to contact him or her. It’s also wise that the executor of your will have access to your documents should that person need it suddenly or unexpectedly.
Have an Emergency Fund
An emergency fund can be a game-changer for several reasons.
First, you may simply need easily accessible funds to live on for a period of time, especially if your home and/or business is physically impacted and unable to open. New construction, the processing of insurance claims and reimbursements can take a long time, and you may need enough cash to tide you over while you wait in line for assistance, along with everyone else who was affected by a storm, hurricane or flood.
An emergency fund can also help with repairs. If your home, computer, car or personal belongings are damaged or destroyed, what will you do? An emergency fund can tide you over until you can permanently repair or replace physical assets.
Talk to a financial advisor about how much you should have on hand based on your specific situation, commitments and spending needs. An emergency fund can tide you over for three months, or a year, depending on your situation.
Your financial advisor can also advise you on ways to fund your emergency fund.
Make a Plan for How to Survive Financially During the Hardship
If you do suffer a damaged or destroyed home, or your business is impacted, how will you survive?
Talk with your financial advisor about contingency planning. If you can’t access your home immediately, for example, where would you stay? At a hotel? With relatives or friends? Once you know your options, you can estimate accurate costs and, in turn, help determine how much you need on hand.
If your ability to earn is impacted by business damage or destruction, what would your options be? How much savings would you need? Can you access programs such as state unemployment benefits? Could you rely on investment funds? Could you cut costs?
Establish a Long-Term Relationship with Your Financial Advisor, So You Know Who to Turn to in Stressful Times
A trusted financial advisor can be an important resource to help get you through troubled times. When you establish a long-term relationship with your financial advisor, you ensure he or she knows you and your situation. Rushing to establish a relationship with a financial advisor during an emergency or time of loss can lead to immediate, emotional decisions that can hurt you in the long-run.
If you’re currently looking for a financial advisor to help with your retirement planning in the South, let’s talk. Linscomb & Williams is a fee-only, fiduciary financial planning and investment management firm headquartered in Houston, Texas that serves investors nationwide. We have offices in and around Houston, Texas; Atlanta, Georgia; as well as Birmingham and Huntsville, Alabama and are prepared to work with clients nationwide. We have more than 50 years of experience helping families build, preserve and manage wealth, and have helped families prepare for the unexpected.
If you haven’t yet started planning for your future, there’s no better time than now. Schedule a no-obligation conversation with the Linscomb & Williams team today.