Own or Rent in Retirement?
Having a place to live is one thing but having a home you can call your own brings you peace of mind and stability. These are things that are very important the older you get. As you enter your retirement and begin enjoying your golden years, the last thing you need is stress about keeping a roof over your head or being priced out of your living space.
Owning your home is a responsibility as well as a joy. Owning gives you stability, however renting offers you more flexibility. Both options have benefits and both also have negatives. Make sure you do what is best for you and work out all the pros and cons.
Glenn Werner, Vice President of David Lerner Associates says, “Get professional advice for your finances especially when it comes to your retirement years. Housing costs will be part of your retirement budget, whether you rent or own. You need to work out what is best for you and your family. “
Owing your home may also mean a mortgage and that can fluctuate depending on the rate of mortgage you have. Not all Americans owe money to the bank though. Some are mortgage-free. Many retirees have paid off their mortgage by the time they retire. An American Financing survey found that 44 percent of homeowners retire unencumbered by any debt. That doesn’t stop you from having to consider property taxes and the upkeep of your home. If the roof starts leaking and you end up with damage or mold, as the owner you are responsible for it. If the heating system needs replacing or an expensive repair job crops up you could be stuck with a run-down property. On the flip side, you have the security of knowing a landlord can’t suddenly serve you with a notice saying the rent is going up or worse that you are evicted for some reason.
Renting may be a good option if you don’t want to worry about unexpected maintenance or repairs and some rental properties have utilities or internet included in the monthly payment. A 2016 Report by Trulia discovered that in cities with a large population of residents 65 and older, renting was less expensive in 98 out of 100 of them.
No matter whether you decide to rent or stay in the home you own make sure you do the math and work out what is best for you long term. Consider your priorities when you retire and make decisions accordingly.
KEY POINTS
- Owning offers stability. It also gives you tax benefits and equity over time.
- Renting provides more flexibility. Spend less money (and time) on maintenance. You can move to multiple places and not be tied down.
- Ownership can be uncertain. Unexpected maintenance expenses, changes in market value, and mortgage rate fluctuations can all increase ownership costs.
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