Many people in Houston and in the surrounding area were hit hard by hurricane Harvey. They have suffered major losses. Hurricane Irma is likely to have long term effects on the U.S. now as well. The entire country will suffer major losses as well in the long run due to the following circumstances, higher gasoline prices, availability of air travel to and from damaged areas, damaged crops, and decreased shipping.
Gasoline prices are expected to increase because 27 percent of the US refining capacity dwells in Texas. Due to refinery closure, less supplies are expected to be available. The length of time the refineries remain closed determine how much gas prices will increase. According to the American Automobile Association (AAA), Texas, Louisiana, Arkansas, and Tennessee are the states who will be impacted most by the rising of gas and oil prices. Trucks are finding their wait time for getting a full tank at the pump has increased as well, since supplies have dwindled. Pipelines, Colonial Pipeline for example, are unable to perform at full capacity due to Harvey, due to the inability for supplies to travel because of the flooding. This inherently has put more strain on other pipelines, such as the one in Louisiana to take responsibility of the usual duties carried out by Houston supply chains.
So many airlines are going to be affected by Harvey since Houston has the second largest airport. Those airline include Alisa Airlines, Delta Airline, Frontier Airlines, Jet Blue Airlines, Southwest Airlines, and United Airlines. Now travel to and from the area is more challenging. This will put a damper on their sales and profits. People who have already purchased airline tickets may be able to obtain a refund, and possibly look for other means of transportation to and from Houston and Florida. However, the cost of doing so will probably increase.
Both food and non-food crops based in affected states were damaged. Many families, businesses, and livestock are going are probably going to suffer from long term affects of Harvey because their prosperity relies on the quality and quantity of the crops grown there in Houston and other surrounding areas. The hurricane has also caused a major impact against the supply of cotton, because Texas is the nations largest cotton producer. Farmers had to and may have to, in the future, work longer hours, and worker harder than before disaster struck. Statistics show the demand of cotton has grown. Due to constant rainfall and flooding caused by Harvey, it is going to be challenging to meet demands by keeping cotton supplies on hand. Agriculture in Florida has been affected as well.
This hurricane season is also expected to impact 401k and retirement plans. It is expected that more people are going to borrow against their 401K and retirement plans due to financial hardship, since the IRS has removed the barriers preventing them from borrowing. Unfortunately, they can still expect IRS penalties because the money is not supposed to be withdrawn until the beneficiary turns 59 1/2.
Remember, there are ports in Miami, Tampa and Houston, some of the largest in the US, and have been negatively affected by the storms, shipping will decrease. Times like these cause a drop in supplies. They also put a damper on trade, which usually results places the state into a financial deficit.
Planning for the unknown should be part of your retirement plan. We are here to plan for a potentially volatile landscape ahead.