Aging Options

Renting Can Beat Buying in Retirement When Moving to a New Area, Reducing Expenses, or Seeking a Better Spot to Age in Place

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Listen to Rajiv Nagaich for even a few of his radio programs or seminars and you’ll hear a recurring theme: the question of where you choose to live in retirement is a key factor that helps determine how successful your retirement will be. As we age, caring for a large home and yard becomes a heavy task, and navigating stairs every day adds risk of falling as the years impair our balance. Home ownership has a steep financial cost as well: paying taxes, insurance, upkeep, and mortgage costs for that home you’ve loved for a few decades can become an unsustainable burden.

So, is renting in retirement the better option? According to reporter Liz Weston writing in a recent NerdWallet article, the answer is a firm “maybe.” Weston gives a few specific situations in which rushing to buy a retirement home, or scrambling to keep the one you have, might not be the best choice after all, in spite of the fact that, according to 2021 statistics, almost 80 percent of Americans 65 and older own their homes.  Before you make up your mind, let’s consider Weston’s scenarios. Her view may cause you to think twice about renting in retirement.

Renting Because You Have to – or Because You Choose to

Weston begins her NerdWallet article with the acknowledgment that everyone’s decision to rent is going to be based on different factors: some choose to rent, and some are financially forced to. That said, renting—even for those who can afford to purchase a home—can sometimes be a wise decision for retirees.

“Renting offers flexibility as well as freedom from all the chores and expenses of maintaining a home,” Weston writes. “Renting also may provide built-in communities for socializing, as well as accessible housing features such as one-floor living, which can help people age in place. People who are ‘house rich and cash poor’ can sell their homes and use the equity to fund a more comfortable lifestyle.”

This leads some financial planning experts to say that renting can be a very wise choice for many retirees, depending on their situation.  

Renting is the Best Way to Test a New Locale

Certified financial planner Delia Fernandez, based on Los Alamitos, California, encourages retirees to rent when they are looking to move into a new area, so they can “get a better feel for the advantages and disadvantages of various neighborhoods.”

The process of finding new doctors, checking out entertainment venues, locating favorite restaurants, and setting up support services is much easier if you’re renting, and so is moving somewhere else if the location turns out not to be right for you. “It makes sense to rent for maybe even a year so you can really dig into the community and figure out what’s going to be the right fit for you,” Fernandez says.

Weston adds, “Renting is often smart if you expect to move again within a few years. Buying and selling homes is expensive, and your home may not rise in value fast enough to offset those costs. Selling a home also may take longer than you expect, especially during a real estate downturn, which could add stress, delays and additional costs to your move.”

Renting Could Help You Age in Place Safely

Accessibility is a huge consideration for retirees hoping to age in place, as we’ve written about many times before on the blog. Unfortunately, few homes are truly accessible to those with mobility problems or age-related disabilities. Further, adapting your current home can be painfully expensive and surprisingly complicated.

If you elect to rent in a new apartment building, you’ll almost certainly enjoy benefits like entry ramps, elevators, and – typically – single-floor rambler-style living. These and other design perks combine to make aging in place much easier.

“Social isolation and loneliness are other risks to consider, since these can have a huge negative impact on older people’s health, according to the Centers for Disease Control and Prevention,” Weston writes. “Apartments can provide a community of people who can socialize and watch out for each other. Rental communities for older adults often offer organized activities and classes to help people connect.”

One Form of Renting: a Retirement Community

A familiar and increasingly popular option is relocating to a continuing care retirement community, or CCRC. These facilities are pricey, but built for long-term aging in place.

“People typically move into one of these facilities when they’re healthy and can live independently, with the promise that they can access assisted living, skilled nursing and sometimes memory care services as they age,” Weston explains. “CCRCs typically charge a hefty one-time entrance fee — the average was $379,606 in the fourth quarter of 2022, according to the National Investment Center for Seniors Housing & Care, a research group. Residents also pay monthly fees that typically increase with the level of care. The average monthly rent was $4,364, NIC found.”

For more on this topic, you might want to check out this article on moving to a CCRC that we published last November here on the Blog.

Renting Allows You to Utilize Your Home Equity

It’s also worth recognizing that your home’s equity can help make up for gaps in your retirement savings. Nicholas Bunio, a financial planner in Berwyn, Pennsylvania, notes, “Many people hit retirement age without enough savings and need to use their home equity to supplement their income. Two common ways of tapping equity — selling a home and buying a less expensive one, or using a reverse mortgage — may not free up enough cash to substantially improve their situations.”

He adds, “If you sell the house and rent, you have this big pile of cash to help cover the rent plus anything extra.”

Renting’s Unknowns: Rent Increases and Other Uncertainties

Renting comes with its own unknowns and pitfalls, of course. Weston writes, “Many retirees understandably fear the possibility of big rent increases when they’re on a fixed income. But retirees should keep in mind that rents aren’t the only housing costs that are subject to inflation. Even when you have a fixed-rate mortgage, chances are good that your property taxes, homeowners’ insurance and costs to maintain and repair your property increase every year as well.”

(If you’re seeking guidelines on how much to pay in monthly rent, here’s another NerdWallet article that may prove helpful.)

Bunio points out that renters can ameliorate the risk of rent increases somewhat by opting for longer leases, and Fernandez adds that so-called “mom and pop” landlords may be more amenable to negotiating rent than large corporations, and being a star tenant also can help. “Landlords like people who keep up their property, and they like people who make any maintenance easy,” Fernandez says.

Eviction is also a potential worry for renters, even if you pay rent on time. A landlord could sell the building and end your tenancy.

But homeownership comes with similar worries, especially as people age. Older people often have to move out of their homes into assisted living facilities for various reasons. Experts recommend moving earlier rather than later, while you still have the energy and health to do it safely and with less stress. Weston ends her article with wisdom from personal finance educator Sara DeSantis: “Make that decision earlier, instead of it being forced upon you.”

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at

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