According to a report from Harvard’s Joint Center for Housing Studies, among households with someone 65 or older, 8 in 10 are homeowners. Yet if you’re nearing retirement and considering a move, you might want to consider renting instead of owning. What’s the scoop?
While many older Americans are homeowners, the amount of renters is steadily on the rise. As Money reports, a survey from RENTcafe.com found that the percentage of renters at least 60 years old jumped 40 percent from 2007 to 2017. One of the main reasons for that is cost. In some places, renting a home costs less than you’d spend annually as a homeowner. Even if you own a home without a mortgage, there are still property taxes, maintenance and insurance costs cutting into your budget. Meanwhile, if you rent, there’s your monthly rent check and that’s pretty much it.
Another factor to consider is the amount of equity in your home. If you have a lot, it could make sense to sell your home and move the profit from selling into your retirement nest egg where it can grow to support you. Keep in mind that the first $250,000 in capital gains from that sale is tax free, as long as you’ve lived in the home for at least two years.
Renting in retirement can also make sense if you’re ready for a hands-off lifestyle. When you rent, everything is taken care of for you. There’s no need to mow the lawn, fix the dishwasher, clean the gutters, etc.
Bottom line, if a move is in your future and you’re nearing retirement, take some time to consider your options. You just might find that renting makes more financial and lifestyle sense.