Retirement Planning

7 Reasons Renting a Home in Retirement Might Be Better

Your parents probably told you that renting is "throwing money away." But in 2025, with mortgage rates in the mid-6% range and home prices near record highs, that advice might be costing retirees thousands of dollars—and a lot of unnecessary stress.

Drew Keever
Drew Keever Co-founder, AdvisorFinder
Jan 16, 2026 · 12 min read · Calculator included

The math has changed. In most major metros, monthly ownership costs now exceed rent by hundreds or even over $1,000, making the decision to rent versus buy far more nuanced than conventional wisdom suggests.

Whether you're approaching retirement or already enjoying it, understanding the real economics and lifestyle tradeoffs can help you make a choice that actually serves your goals—rather than following outdated rules.

The 2025 Reality Check

6.5%+ Current mortgage rates
32 of 50 Major metros where renting is cheaper
$1,000+ Monthly cost gap (own vs rent) in many markets
7-10 yrs Minimum to break even on buying

"Renting is cheaper than buying in 32 of the 50 largest U.S. metros at current rates."

— Empower 2025 Housing Analysis
1

Flexibility to Move When Life Changes

Your needs at 65 aren't your needs at 80

Retirement can span 30 years. The beach town that's perfect when you're active may not work when you need to be closer to medical care or family.

Renting lets you move without the friction of selling a home. No waiting for buyers, no staging, no real estate commissions eating into your equity.

Want to try a new city for a year? Follow the grandkids when they relocate? Spend winters somewhere warm and summers somewhere cool? Renting makes this possible without major financial transactions each time.

Key insight: The average retiree moves 1-2 times after their initial retirement relocation. Owning makes each move a six-figure decision.

2

Freedom from the Maintenance Burden

At some point, you don't want to deal with a roof replacement

Homeownership means you're always one major repair away from a $15,000 problem. Water heater fails. HVAC needs replacing. Roof starts leaking. Foundation cracks.

When you're 55, you might handle this yourself or at least manage the contractors. At 75? The physical and mental load of home maintenance becomes a real quality-of-life issue.

Renting transfers that burden entirely. Something breaks, you call the landlord. No contractor negotiations, no surprise bills, no weekends spent on repairs.

Key insight: The average homeowner spends 1-4% of their home's value on maintenance annually. On a $400,000 home, that's $4,000-$16,000 per year—every year.

3

Keep Your Capital Liquid and Working

A house is a very expensive way to store wealth

In 2025, the median U.S. home price sits around $400,000. In desirable retirement destinations, it's often much higher. That's a significant portion of most retirement portfolios locked into a single, illiquid asset.

That money in a home isn't generating retirement income. It's not diversified. It can't be easily accessed if you need it for healthcare or other expenses.

Renting lets you keep that capital invested in a diversified portfolio, generating income, and available when you need it. You maintain control. This is exactly the kind of decision where working with a financial advisor can help you see the full picture.

Key insight: A $400,000 investment portfolio at a 4% withdrawal rate generates $16,000/year in retirement income. That same $400,000 in home equity generates $0 in income unless you sell or take out a reverse mortgage.

4

Avoid Catastrophic Property Risk

When disaster hits, renters pack a bag. Owners rebuild their lives.

This isn't hypothetical. Recent hurricane seasons have devastated communities across Florida's Gulf Coast. Homes that families had lived in for years—gone or gutted in hours.

If you own, you're looking at months or years of rebuilding. Insurance claims that drag on. Contractors who are booked for 18 months. Living in temporary housing while your life is in limbo. Even with good insurance, the emotional toll is immense.

Renters in the same storm face real hardship too—displacement is traumatic regardless. But they're not simultaneously navigating a six-figure rebuilding project. They find a new place. They move on. The financial devastation doesn't compound the emotional devastation.

Climate reality: Florida homeowner's insurance premiums have tripled in many areas since 2020. Some barrier island communities have seen insurers pull out entirely. And this isn't just Florida—wildfires in California, tornadoes in the Midwest, flooding across the country.

5

Escape the Hidden Costs of Ownership

The mortgage payment is just the beginning

When people compare renting versus buying, they often focus on mortgage payments versus rent. But ownership costs go far beyond the mortgage:

Property taxes 1-2% of home value annually. On a $400,000 home, that's $4,000-$8,000/year—and they tend to increase over time.
HOA fees If you're in a condo or planned community, expect $200-$800/month. Special assessments can add thousands more with little warning.
Insurance Homeowner's insurance has skyrocketed, especially in climate-vulnerable areas. In Florida, comprehensive coverage can exceed $10,000/year.
Maintenance Budget 1-4% of home value annually for upkeep, repairs, and eventual replacements.

These costs don't build equity. They're just the price of ownership—and they're often underestimated when people compare "renting vs. buying."

Key insight: A 2024 Bankrate study found the "hidden costs" of homeownership average $18,000/year beyond the mortgage—maintenance, insurance, taxes, and fees combined.

6

Try Before You Commit

That dream retirement town might not be what you imagined

Everyone has a vision of where they'll retire. The beach. The mountains. Near the grandkids. A college town with culture and restaurants.

But the reality of living somewhere full-time is different from visiting. The summers might be unbearable. The healthcare options might be limited. You might miss seasons, or urban amenities, or old friends more than you expected.

Renting lets you test-drive retirement locations. Spend a year in Asheville. Six months in San Diego. A winter in Arizona. Find out what actually works for your life before you commit hundreds of thousands of dollars to a property.

Key insight: Studies suggest 30-50% of retirees who relocate eventually move again—often back toward where they started. Renting first can prevent an expensive mistake.

7

Simplify Your Estate and Reduce Burden on Heirs

Your kids probably don't want to deal with selling your house

When you pass away owning a home, someone has to deal with it. Your heirs need to maintain it, pay the taxes, handle repairs, clear it out, and sell it—often from a distance, often while grieving.

This can take months and cost thousands in carrying costs. If the home has deferred maintenance or is in a difficult market, it becomes a burden rather than a gift.

Renting eliminates this entirely. Your estate is liquid, divisible, and simple. Your children aren't stuck managing a property. The transition is cleaner for everyone.

Key insight: Estate attorneys consistently report that inherited real estate creates more family conflict and stress than almost any other asset type.

Retiree Rent vs. Buy: Side-by-Side Comparison

The right choice depends on your specific situation—but here's how the tradeoffs typically break down:

Dimension Renting Owning
Monthly cash cost Often lower than new purchase; no repair surprises Lowest if mortgage-free; higher if newly purchased
Cost trend over time Expect 3-5% annual rent increases Slower increases from taxes/insurance; mortgage fixed
Expense volatility Predictable; landlord absorbs big repairs Lumpy repairs (roof, HVAC) and tax changes
Equity & net worth No equity accumulation Builds/preserves equity; can be tapped later
Flexibility & mobility High; easier to relocate or downsize Lower; selling costs and market timing matter
Inflation protection Low; rents adjust with market Higher; real housing cost tends to fall over time
Maintenance burden None; landlord handles everything Full responsibility; can be significant at 75+
Estate simplicity Liquid assets; easy to divide Illiquid; heirs must manage/sell property
Real Example

Meet Sarah, 67

Sarah sold her paid-off $500,000 home in Virginia Beach after her husband passed. She now rents a nice 2-bedroom apartment for $1,800/month in a walkable neighborhood closer to her daughter.

She invested the roughly $470,000 (after selling costs) in a diversified portfolio. At a 4% withdrawal rate, that generates about $18,800/year—more than covering her rent increase versus her old property taxes and maintenance costs.

More importantly: she's not alone in a too-big house. She's not worrying about the next repair. And if she decides to move closer to her son in Colorado next year, she can.

The math worked. But what really mattered was the freedom and peace of mind.

Rent vs. Buy Calculator

Enter your numbers to see a simplified comparison. For a complete analysis including tax implications, investment returns, and your full financial picture, consider working with a financial advisor.

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Frequently Asked Questions

No. Renting can be the smarter financial move, especially in today's market. With median monthly costs for owned homes (taxes, insurance, maintenance) around $520 for paid-off properties and market rents averaging $1,500+, the math depends entirely on your situation.

If you're buying new, monthly ownership costs often exceed rent by $1,000+ in many markets. The key is running the numbers for your specific scenario rather than following outdated rules of thumb.

Rent increases and potential forced moves are the main concerns. Expect 3-5% annual rent increases, and in tight markets, potentially more. Unlike owning, you're also subject to landlord decisions about selling the property or significantly raising rent.

That said, these risks can be managed with adequate savings buffers and flexibility in your housing expectations.

Generally 7-10 years minimum with current prices and rates. Transaction costs (realtor fees, closing costs) and higher interest expenses are front-loaded, so you need time for equity buildup and appreciation to offset these.

If you're not confident you'll stay that long, renting usually wins financially. A financial advisor can help you model the breakeven point for your specific situation.

This depends heavily on your specific costs and local market. If your monthly costs (taxes, insurance, utilities, maintenance) are well below what comparable rent would be—common for long-time homeowners—owning often wins.

However, if you're in an expensive home with high carrying costs, want to relocate, or need to free up equity, selling and renting could improve your cash flow and reduce stress. This is exactly the kind of analysis where working with a financial advisor pays for itself.

Yes, but it requires discipline. The money you save by renting versus owning needs to be invested rather than spent. If renting saves you $800/month versus buying, investing that difference consistently can potentially build wealth while maintaining flexibility.

The challenge is actually doing it—home equity is "forced savings" while investment contributions require active decision-making. If you're wondering whether you have enough to retire comfortably while renting, here's a helpful framework.

Should You Rent or Buy in Retirement?

Ask yourself these questions to help clarify your decision:

Am I confident I'll stay in this location for at least 7-10 years?
Do I have significant assets beyond what I'd put into the home?
Is the area low-risk for climate events (hurricanes, wildfires, flooding)?
Do I genuinely enjoy home maintenance and improvement projects?
Do I have family nearby who could help if health issues arise?
Would owning simplify (not complicate) my estate plan?
Have I actually run the numbers—not just assumed buying is better?
Can I afford the purchase without becoming "house poor"?

If you answered "no" to several of these, renting may be the smarter choice. If you answered "yes" to most, buying could make sense—but run the numbers first.

When Buying Might Still Make Sense

This isn't a blanket recommendation against homeownership. Buying may be right for you if:

  • You're certain about your location and have lived there at least a year
  • You have significant assets beyond the home purchase and won't be house-poor
  • The area has low climate risk, stable insurance markets, and reasonable property taxes
  • You genuinely enjoy home maintenance and improvement projects
  • You have family nearby who could help if health issues arise
  • Your estate plan specifically benefits from real estate ownership

The key is making the decision intentionally—not defaulting to "that's just what you do" or chasing an outdated American Dream that may not serve your actual life.

This Decision Deserves Serious Analysis

Rent vs. buy is a financial decision that affects your portfolio, your cash flow, your tax situation, your estate plan and your lifestyle. The right answer depends on your specific numbers.

A financial advisor can model out both scenarios for your situation: What does your retirement look like if you buy? What does it look like if you rent and invest the difference? What are the actual risks and trade-offs given your assets, income, and goals?

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