Planning for My Financial Future Without Giving In to Fear

In today’s entry, I’m laying out my worries and fears about the effects of inflation on my non-COLA pension, along with some plans I’ve already made and some possible options I have to ensure secure housing as I age. But first, a related—and true—story...

One evening, after talking on the phone with my mother for about an hour, I had just started cooking dinner when I received an emergency alert telling me to take cover because a storm capable of producing a tornado was passing through my area. It can be quite unnerving to receive one of these messages while observing worsening conditions outside the window in real time, confirming your worst fears.

Suddenly, the sky darkened, the wind picked up, torrential rain began to fall, and it got really noisy outside. My thoughts were: This might be my last meal. In fact, I might not even get to finish cooking if the power suddenly goes out. This house has no basement. Where can I take cover? I have no idea what would happen if a tornado were to strike this house. What exactly would it do—crash through the walls and ceiling and suck me out? When my mom hears about my death, I know she’ll say, “I was just talking with her!”

The tornado didn’t strike my house, but it did strike other buildings in the vicinity, including some that were occupied. It tore off roofs and ripped through walls. Miraculously, few casualties were reported.

Perhaps I overreacted a bit. If that particular tornado had struck my house, the odds were that I would’ve survived, although I might have had to pay an insurance deductible to get my house repaired. By the way, I need to find out whether that deductible would be a fixed dollar amount or a percentage—and how much I should have in my emergency fund to cover it.

A couple of days later, I had a conversation with a cousin who helped me realize that I wasn’t prepared for a tornado, basement or not. I simply wasn’t knowledgeable enough about it.

This cousin, a retired firefighter, taught me that a basement with windows is not necessarily safe. The key is to find an enclosed space with no windows, preferably on the lowest possible level of the home. The space also should not be located underneath very heavy objects, such as a refrigerator, in case the house comes down on top of you.

Equipped with this new knowledge, I’ve been able to identify the safest place in my house to take shelter next time: on the ground floor, underneath the entryway staircase. The only things directly above this space are two staircases, the ceiling, and the roof.

While there’s no guarantee that I’d survive if the whole house came down, at least I’m comforted knowing ahead of time the best action I can take for my safety. I can only give the rest to God.

Staying informed and planning beforehand can ease worry and fear. That is exactly what I’m doing—not only in case of a tornado, but also in the case of my financial future.

My Financial Future

I’m working on finding a balance between trusting in God and taking action toward my needs and wants. I think the key is to avoid acting out of worry and fear. Those are just feelings that will arise. I can’t always control how I feel, but I can control my response.

Of course, history has shown that when my actions come from a place of fear, worry, or other strong emotions, I’m prone to make the wrong decisions.

I acknowledge that I’m feeling worried and concerned about my financial future. I’ve run the numbers. It’s crystal clear that inflation and the lack of a cost-of-living adjustment on my pension will inevitably result in budget shortfalls—possibly sooner than I would like.

The good thing is that, right now, all of my bills are paid, and I even have several thousand dollars in savings. I have the ability to earn additional money each year through part-time and seasonal work.

I’m also currently in a very good position as far as my housing is concerned. I own a relatively safe, peaceful, and gorgeous home with a solid amount of equity, TGBTG.

A good way for me to avoid acting out of fear is to stay informed and plan carefully now, before the shortfalls happen. I’ve already set up a workable financial system that includes my pension, supplemental income, future Social Security benefits—minus any potential cuts—calculated spending, paying off my student loans and mortgage, saving, and investing.

Another angle I need to consider is my future housing. I don’t yet know where I will live for the rest of my life, and I don’t need to decide that today. What I can do is identify my options and investigate them carefully before circumstances force me to make a rushed decision.

My Future Housing Options

Here are all of the housing options I’ve considered so far, in order from most to least desirable:

• Sell my current house and buy my dream home.
• Pay off my mortgage and update my home to make it aging-in-place friendly.
• Once I begin collecting Social Security, double down on my mortgage payments to pay it off sooner, while updating my home to make it aging-in-place friendly.
• Convert my ground floor into a separate living space and use it as an apartment for myself while renting out the main and upper floors.
• Rent out my entire home and move into an affordable rental that is senior-friendly and closer to family and friends.
• Sell my home and use some of the proceeds to buy a more affordable place, such as a condo, manufactured home, or tiny home.
• Sell my home and rent somewhere closer to family and friends.
• Combine resources by making arrangements to share living expenses with a close family member or friend, either through joint ownership or a rental arrangement.

I plan to explore these housing possibilities one at a time, including the costs, benefits, risks, and logistics involved. I don’t expect to make any major housing decisions anytime soon. Right now, my goal is simply to understand my options while I have the time and freedom to consider them carefully.

Coming next: I’ll begin with land leases. Buying a home without buying the land underneath it can initially appear to be an affordable alternative to traditional homeownership—but I’m learning that the arrangement comes with some serious financial risks. That will be the subject of my next post.

For more conversation on this and other early retiree topics, be sure to browse the playlists on my YouTube channel and visit my podcast on Spotify.