A Semi-Retired Savings Strategy To Fight The Rising Cost Of Living
Rent, property tax, you name it
I was right—
Let’s say we see a 6% rent hike in 2024. With inflation cooling, let’s cut it in half for 2025. And, for the ease of illustration, let’s assume a 3% increase, every year, for the next ten years. That would bring our rent to $1,994.69 by 2035. When I’m 60 years old.
I’m 48 and our rent is now—starting in February—$1,488 per month.
A bargain by LA standards, especially for the apartment we have in the neighborhood where we live, but still a big chunk of obligated change to pay out every single month with the real possibility that it’ll go up every single year. Thus, a big reason why we’re moving to a place where we can eventually buy an apartment and be housing payment-free. It’s a logical alternative to budgeting at least two grand a month in just over a decade.
That said, I got to thinking the other day. What if we wanted to make it work in Los Angeles or another relatively high-rent city? Is there a quirky, weird savings strategy to make paying for housing into relative old age a bit more comfortable and less stressful? Because, after all, we can easily afford our rent today and, as annoying as it would be, could likely make it work 10, 20, even 30 years from now. But how to make it more palatable on the mind and pocketbook?
What I came up with basically turns traditional savings—in practice, in spirit, in intent, with relation to goals—on its ear. We go deep in the inflation weeds to consider a savings strategy to combat expenses—such as rent or property tax—you can pretty much count on going up at regular, most likely annual intervals. This approach could help accomplish things with money that go beyond the original cost of living concerns.