Suntans, Gas, and Food Prices

I’m reminded our economy is linked to the changes in our climate, as I slide back into my hammock hung between two ancient pines. The river roars past me making its way south to the Rio Grande. Great rivers form the earth’s circulatory system revealing Mother Earths health and well – being. Rivers also provide us answers to our questions. All too often rivers prompt us to ask better questions. How many of us know what the real connection between our weather and our pocket books is?

Turning on my side I ask my question directly to the river. Is climate change really a threat to my nest egg? Fly Fishing forces one to focus on the water, snow packs, and the changes of seasons. This daily observation/meditation deepens one’s respect and connection to nature. The primary threats to one’s nest egg over the next 30 years are poor investment returns on one’s nest egg, inflation, and health care costs. Inflation is real concern for many retirees living on a fixed income. For more background on inflation please see my previous post Sixty & 6,000 Days – How to Prepare Financially.

Accurately forecasting and budgeting for one’s energy and food costs over the next 30 years is tricky. Just when you thought the cost of gasoline was the culprit it turns out food could be too!

What experts say

“As a result, Buffett warns: “If you ask me if the U.S. Dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not.”

“A declining dollar weighs on personal incomes, leaving households to pay more for imported items that would go up in cost because of decreased buying power, Feldstein said, of the National Bureau of Economic Research.”

“The cost of living in the U.S. increased 27 percent during the last 10 years, compared with 30 percent in the previous decade and 49 percent in the 10 years before that, according to the Labor Department’s consumer-price index.”

I recommend future retirees have a plan in place to reduce energy and food costs by 25% on a monthly basis when warranted. Also I recommend that future retirees overfund the gasoline, electricity heating/cooling, and food categories in their retirement plan budget. It’s not a bad idea to plan on  planting an organic garden too. How can climate change impact one’s nest egg? Future retirees would do well to ignore doomsday conspiracy theorists and the like.

This following assertion is based on science.

Basically, the combination of explosive population growth and climate change make the cost of food and energy world wide continuously rise.

The U.S. Bureau of Reclamation reports that long droughts of five years or more will occur 40 percent of the time during the next 50 years. Retirees are the most susceptible to harm from heat waves.  Heat-related deaths (mostly seniors) make up the greatest number of U.S. annual fatalities, outpacing all other natural disasters.

This news does not bode well for fighting forest fires. Many states incur significant costs associated with fighting fires, especially tough now with already strained state budgets.

The federal agency report projects a 9 percent decrease in the Colorado River’s volume annually for the next half decade. This will likely accelerate the increased costs for water across the state of Colorado, as well as increase the cost of food production in Colorado and the other seven western states that depend on the Colorado River for their water supply.

Prud’homme’s The Ripple Effect is an outstanding book examining fresh water in the 21st century. What he found was shocking: as the climate warms and world population grows, demand for water has surged, but supplies of freshwater are static or dropping, and new threats to water quality appear every day.

The author’s research reveals the ocean is under attack as well. Dead zones from farm runoff, increased acidity from increased levels of carbon dioxide, habitat destruction, melting sea ice, and overfishing are occurring more rapidly than even worst-case scenarios predicted just a few years ago. Check out his book, he presents the best research available at the moment.

At this point many readers will likely wish to throw cold water on this economic firestorm. Fresh, clean cold water may be in short supply. Unfortunately, fresh water could turn out to be one of the key factors in the cost of food down the road.

Staring intently into crystal clear, braided pocket water, I smile, recalling how yesterday I was getting lost in what I love doing. I genuinely enjoy being as busy as I want to be creatively. It turns out gardening and fishing are more than just fun activities. They are also inflation, nest egg, protection.

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About Roger O'Keefe

My background is in education and finance. I'm a published author and photographer, former radio talk show host, and creative retirement planning expert. My work is a love of labor, I do not sell any products of any kind. I've appeared as a guest on more than 50 national and local television and radio shows. With a Masters in education, I'm a licensed educator and author of the “Future Bright Program” and the California State Department of Education “Teacher Appreciation Program.” I'm a member of the American Association of Retired Persons and the National Care Planning Council NCPC. I'm currently writing my second book and reside in the Rocky Mountains of Colorado. My mission is to reshape retirement planning one person at a time. Please visit my website www.creativeretirementplanning.net and take advantage of the many complimentary online seminars, resources, and retirement planning tools.
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