When you’re living on a fixed retirement income, you may decide to shake off the burden of a mortgage in favor of a smaller, fully paid-for home. But when is it a good idea to downsize into a rented apartment?
A recent article from smartasset.com (“Is Apartment Living the Right Choice for After Retirement?” April, 2014) points out one benefit of apartment living—the lack of maintenance that is required. For some people, not having to shovel snow, mow the lawn or repair a garbage disposal is an important component of a happy retirement. Renting also affords you flexibility. It’s often easier to find a rental than it is to buy a house—you can even rent in different parts of the country for different times of the year.
The downsides of renting must be considered, too, as pointed out in a related AARP article (“You’re Moving: Should You Rent or Buy?” October, 2014). Your living situation is temporary: You may have to move out if the owner decides to sell. Additionally, you can’t change your rented living space to better suit you and your needs, and your pets may not be allowed. Some longtime homeowners may not feel as comfortable in a space that they don’t own.
While some may think of renting as simply “throwing your money away,” it is important to remember that, while your rent will likely increase each year, so will insurance, taxes, and other costs associated with home ownership. Your personal and financial situation will determine what is best for you.
What’s your retirement housing plan—will you rent or own?