{"id":3470,"date":"2023-04-13T15:40:27","date_gmt":"2023-04-13T19:40:27","guid":{"rendered":"https:\/\/www.skypointfcu.com\/wph\/workarea\/?p=3470"},"modified":"2023-04-13T15:40:49","modified_gmt":"2023-04-13T19:40:49","slug":"should-you-rent-in-retirement","status":"publish","type":"post","link":"https:\/\/www.skypointfcu.com\/wph\/workarea\/blog\/should-you-rent-in-retirement\/","title":{"rendered":"Should You Rent in Retirement?<\/strong>"},"content":{"rendered":"\n

Some people rent in retirement<\/a> because they don\u2019t have much choice; they can\u2019t afford to own homes. But financial planners say renting can make more sense than owning in some circumstances, even for retirees who can afford the costs of homeownership.<\/p>\n\n\n\n

Renting offers flexibility as well as freedom from all the chores and expenses of maintaining a home. 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 \u201chouse rich and cash poor\u201d can sell their homes and use the equity to fund a more comfortable lifestyle.<\/p>\n\n\n\n

\u201cWhile retirees often don\u2019t want to rent, it can be a smarter decision for a number of reasons,\u201d says certified financial planner Lisa A.K. Kirchenbauer of Arlington, Virginia.<\/p>\n\n\n\n

Consider renting if you\u2019re in transition<\/strong><\/p>\n\n\n\n

If you\u2019re moving to a new area, financial planners often recommend renting first to get a better feel for the advantages and disadvantages of various neighborhoods. You\u2019ll need time to find new doctors, check out entertainment venues, locate favorite restaurants and otherwise set up your support services, says Delia Fernandez, a certified financial planner in Los Alamitos, California.<\/p>\n\n\n\n

\u201cIt makes sense to rent for maybe even a year so you can really dig into the community and figure out what\u2019s going to be the right fit for you,\u201d she says.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

Renting could help you age more safely and serenely<\/strong><\/p>\n\n\n\n

Few homes are truly accessible<\/a> to people who have mobility problems or other age-related disabilities, and adapting your current house could be prohibitively expensive. Newer apartment buildings could offer ramps, elevators, one-floor living and other amenities to keep you safe as you age.<\/p>\n\n\n\n

Social isolation and loneliness are other risks to consider, since these can have a huge negative impact on older people\u2019s health, according to the Centers for Disease Control and Prevention. 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, says Sara DeSantis, a personal finance educator in Denver.<\/p>\n\n\n\n

Another option, for those who can afford it, is a continuing care retirement community, or CCRC, that allows you to stay in one place even if you later need higher levels of care. People typically move into one of these facilities when they\u2019re healthy and can live independently, with the promise that they can access assisted living, skilled nursing and sometimes memory care services as they age. CCRCs typically charge a hefty one-time entrance fee \u2014 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.<\/p>\n\n\n\n

Renting could help you tap more equity<\/strong><\/p>\n\n\n\n

Many people hit retirement age without enough savings and need to use their home equity to supplement their income, says certified financial planner Nicholas Bunio of Berwyn, Pennsylvania. Two common ways of tapping equity \u2014 selling a home and buying a less expensive one, or using a reverse mortgage \u2014 may not free up enough cash to substantially improve their situations, Bunio notes.<\/p>\n\n\n\n

\u201cIf you sell the house and rent, you have this big pile of cash to help cover the rent plus anything extra,\u201d Bunio says.<\/p>\n\n\n\n

Coping with rent increases and other uncertainties<\/strong><\/p>\n\n\n\n

Many retirees understandably fear the possibility of big rent increases when they\u2019re on a fixed income. But retirees should keep in mind that rents<\/a> aren\u2019t the only housing costs that are subject to inflation<\/a>. 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, says Crystal Cox, a certified financial planner in Madison, Wisconsin.<\/p>\n\n\n\n

Renters can ameliorate the risk of rent increases somewhat by opting for longer leases, Bunio says. So-called \u201cmom and pop\u201d landlords may be more amenable to negotiating rent than large corporations, and being a star tenant also can help, Fernandez notes.<\/p>\n\n\n\n

\u201cLandlords like people who keep up their property, and they like people who make any maintenance easy,\u201d Fernandez says.<\/p>\n\n\n\n

Another potential worry is the possibility of eviction. Even if you can keep up with the rent, a landlord could end your tenancy by selling the building, for example.<\/p>\n\n\n\n

But homeowners aren\u2019t immune to potential dislocations, DeSantis notes. Many older people must move into assisted living facilities because they\u2019re no longer safe in their homes. She recommends people consider moving to more supportive housing while they still have the health and energy to manage the transition.<\/p>\n\n\n\n

\u201cMake that decision earlier, instead of it being forced upon you,\u201d DeSantis says.<\/p>\n\n\n\n

This article was written by NerdWallet and was originally published by The Associated Press.<\/em><\/p>\n\n\n\n

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