Welcome to Extreme Investor Network, where we provide unique and valuable insights on personal finance topics such as housing and retirement planning. Today, we’ll delve into the trend of older Americans opting to rent rather than own their homes in retirement.
According to the Joint Center for Housing Studies at Harvard University, most older adults aged 65 and over own their homes. However, more than 1 in 5 older households, totaling 7 million, choose to rent instead. Renting in retirement offers benefits such as avoiding costly home maintenance and providing flexibility to move without the hassle of selling a home.
Jennifer Molinsky, director of the housing an aging society program at the Joint Center for Housing Studies, highlights that renting often comes with more amenities, less maintenance, and increased accessibility. However, older renters face the same challenge as younger tenants – rent price increases.
In 2022, half of all renter households (22.4 million) were classified as cost-burdened, spending more than 30% of their income on housing and utilities. This issue is particularly concerning for retired renters, who are on fixed incomes and vulnerable to rent hikes.
Certified financial planner Lazetta Rainey Braxton emphasizes the variability of housing expenses for retired renters, as these costs are subject to market trends and can impact financial stability in retirement.
The trend of fewer older homeowners can be attributed to factors such as downsizing among older baby boomers and the difficulties of regaining homeownership at the cusp of retirement. As a result, more individuals who have always been renters are entering their old age without owning a home.
While homeownership comes with its own set of challenges and costs, including ongoing maintenance and capital improvements, renting in retirement can offer a viable alternative for those looking to avoid the responsibilities and expenses associated with homeownership.
At Extreme Investor Network, we understand the importance of making informed financial decisions in retirement. Consider the pros and cons of renting in your later years, weigh the costs of homeownership versus renting, and plan ahead for any care or services you may need to stay comfortably in your chosen housing option. Stay tuned for more valuable insights on personal finance and retirement planning from Extreme Investor Network.