Rent Or Own? Which Is The Best Housing Choice In Retirement?


Should you rent or buy in retirement? Getty Images

For our readers currently renting and nearing retirement, running out and buying a new house now would likely not help you reach your goal or retire faster or easier. You may be surprised at the prices of less desirable apartments that are being rented by homeowners. It is important to take your retirement into consideration when making a move. The struggle is different when you retire. It’s a whole different struggle once you’ve retired.

Here are a few areas to consider when deciding whether to rent or own a home as a retiree.

Are you sitting on a ton of home equity?


To make your home part of your strategy for retirement income, you have to be willing and able tap into the equity. You could carry a mortgage through retirement, sell your home, rent out your house, or even take a reverse-mortgage. For some, it may be best to keep the home, especially if you have a small mortgage and historically low interest rates. Some people who have not had much equity or have bought more recently may have to sell their home to lower their retirement costs. She lives in a single-story house that she wants to stay forever. Do you want to stay in the same city or state? Will You Have To Sell Your House To Retire

Many Baby Boomers own homes that they will not be able afford to retire in. It may be best to sell your home in order to reduce housing costs after retirement. It’s good to know that baby boomers are living longer than anticipated. The bad news is that their retirement savings will also need to last much longer as their longevity increases.

Owning a home can be stressfull and costly.


Is Owning A Home An Asset Or A Hassle?

Yes, homeownership is an achievement and something to be proud of. It can also be a huge responsibility, or even a money-pit. Live there long enough, and there will always be needed repairs, replacements, and maintenance costs, not to mention property taxes, which, thanks to the Tax Cuts and Jobs Act of 2017 (Trump Tax Plan), are not fully deductible for many California homeowners.

Renting can be cheaper, especially in the short run. Rent increases over time are a major disadvantage to renters. Let’s be honest: if you start renting in your seventies or eighties, inflation and rental increases will be less of an issue over your lifetime than for someone in their twenties or thirties.

Related: How To Keep Healthcare Costs In Check During Retirement

If you are planning to move in retirement, you may need to change you choice of renting or owning as

you age.


Are You Planning To Move In Retirement?

If you plan to move in retirement, consider how long you plan to stay in your new home. Home ownership is more advantageous if you have a shorter timeframe. It is true when real estate markets are booming and it is even more true when they aren’t. The shorter your timeframe, the more likely you will benefit from renting as a retiree.