Should You Be Renting After 60?
When a lot of people mention retirement planning, they think about planning to live in a home that they own for the rest of their lives. In many cases, this may even be a home that is paid off in full, so you don’t have to deal with mortgage payments. However, that isn’t realistic for everyone, nor is it what every person wants. For a lot of people, renting after 60 makes sense.
So, what’s the right choice for you? As with most retirement decisions, the answer depends on your situation and your preferences. The choice isn’t cut and dry. For many retirees, renting makes as much sense (or even more sense) than owning a home.
Renting in Retirement: Pros and Cons
There are a lot of reasons to consider renting after 60. The main benefit to renting is the flexibility. You’re not tied down to one address for years and years. Yes, maybe you’ll sign a one-year lease, but that’s it. After the year is up, you’ll be free to go wherever you please. You won’t have to worry about lining up a sale or dealing with closing costs or anything other than hiring movers (if you want to). This can be a huge plus to renting if you’re the type of person who wants to live their retirement on the go.
You’ll also have a landlord to help you out in terms of maintenance. If your water heater leaks or your fridge breaks, this isn’t your responsibility. You’ll be able to call someone who can fix your problem without a hassle.
Of course, there are cons. Perhaps the biggest is you’ll have monthly expenses in the form of rent. If you own a home, eventually you stop needing to make mortgage payments. If you rent, you need to pay monthly every single month for the rest of your time living there. Depending on rental costs in the area, these expenses can be significant.
Owning a Home in Retirement
While renting provides greater flexibility, owning a home gives better stability. No one can force you to move, you’re able to do whatever you’d like with your home in terms of décor and renovations (though there may be restrictions in place from your condo board or homeowners’ association), and you don’t have to answer to a landlord.
If you have significant equity in your home (especially if it is fully paid off), your costs will probably be quite low. You’ll only need to pay property taxes and maintenance costs. If the housing market is strong, your home’s value will increase as you live in it. Plus, if you own a home and then sell it, that will give you a significant amount of money (depending on the sale price and how much equity you have in the property). This money can be used to travel, enjoy hobbies, and cover some of the expenses associated with retirement.
However, when you live in your own home, you’re responsible for it. That means you need to handle maintenance, deal with replacing appliances as they break, and take care of all aspects of the house. This can be difficult as you age and, of course, there are always costs associated with this work.
Also, when you own a home, stability goes both ways. Yes, you can’t be forced to move, but it’s also more difficult to pick up and live somewhere else. If that’s important to you, then you may want to rent.
Choosing Between Owning and Renting After 60
When it comes to making the right choice for you, start by thinking about what matters to you. What do you value more, flexibility or stability? If you plan to travel, live in different areas, or even if you just don’t want the stress and hassle that come with owning a home, you may decide that renting makes more sense.
If you want to stay in the same place long-term, have the freedom to do whatever you wish with your home, and build equity that you could potentially pass on to your children or grandchildren one day, then home ownership could be the right choice for you.
Each person is different and your goals, values, and lifestyle will help dictate the path you should follow. You don’t need to own a home just because everyone else you know does; you can rent if that’s the better option for you. Remember, your retirement should be lived the way you want to live it, not based on others.
