When planning for retirement, one of the biggest questions you may face is, “Should you rent or own in retirement? This decision can impact your finances, lifestyle and overall peace of mind during your golden years. Some people argue that only one option is correct, but RetirementMagazine and Beck, Lenox & Stolzer Estate Planning and Elder Law both recommend weighing the pros and cons for your unique situation.
What are the Benefits of Owning a Home in Retirement?
The American Dream has centered on owning your own home for generations. Likewise, the advantages of homeownership in retirement speak for themselves. Owning your home provides a sense of stability. You don’t have to worry about rising rent prices or the landlord’s decisions forcing you to move. However, owning a home also has some drawbacks:
What are the Downsides of Owning a Home?
While month-to-month costs of homeownership can be lower, there are periodic large expenses. Maintenance and repairs can throw off your regular budget and consume much of your time. Likewise, property taxes and fluctuating real estate markets can make for unstable long-term expenses. Breaking a lease and renting a new home is easy. However, leaving a home you own is slow and complex.
Why Consider Renting in Retirement?
Renting can offer several benefits that might be appealing, especially as you enter retirement. Above all, renting offers flexibility and regularity in your costs. If you’re already planning to sell your home, entering into a lease is simpler and costs less up-front than buying. Significant expenses and worries like maintenance are also your landlord’s responsibility. However, the drawbacks of renting are that you don’t build equity and lack control over your space.
What Factors Should You Consider When Choosing to Rent or Own in Retirement?
When deciding whether to rent or own in retirement, consider the following:
- Financial Situation: Assess your savings, income and overall financial health. Can you afford the costs associated with homeownership, or would renting be more manageable?
- Lifestyle Goals: Think about your retirement dreams. Do you want to travel, downsize, or stay close to family? Your lifestyle goals can help guide your decision.
- Health and Mobility: Consider your current and future health needs. If you have mobility challenges, consider the cost of renting a suitable home vs customizing one you own.
Make the Most Informed Decision Possible
Deciding whether to rent or own in retirement is a significant decision that can impact your financial security and quality of life. We can help you navigate this choice in your comprehensive retirement planning. Contact us today to schedule a consultation and create a plan tailored to your needs and goals. Check here to schedule a free phone consultation with one of our attorneys.
Should You Rent or own in Retirement: Key Takeaways
- The Benefits of Owning Your Home in Retirement: Homeownership offers equity-building and full control over your own property.
- The Benefits of Renting in Retirement: Renting is flexible and shields you from large expenses or market volatility.
- Choose Whether Renting or Owning is Right for You: Assessing your financial situation, lifestyle goals and health needs allows you to make the best decision for your retirement.
Reference: Retirement Magazine (Oct. 23, 2023) “Renting or Owning in Retirement: Which Is Better?”
