I keep hearing the same piece of retirement advice: renting is better than owning in retirement.
And I understand the argument.
Renting can eliminate many of the headaches that come with owning a home. There’s no roof to replace, no furnace to worry about, and no lawn to maintain. If something breaks, you call the landlord. If you decide you want to live somewhere else, you have much more flexibility to move.
There’s a lot about renting in retirement that appeals to me.
There’s just one problem.
I can’t afford the rent.
And I suspect I’m far from the only retiree facing that problem.
The Problem With the “Sell Your House and Rent” Advice
Many of the discussions I’ve seen about renting in retirement begin with an example that goes something like this:
You have a paid-off house worth $500,000.
You sell the house, invest the $500,000 and rent instead. Your money remains invested, you eliminate many of the costs and responsibilities of homeownership, and you gain more flexibility in retirement.
That can make perfect sense.
But what happens when the house isn’t worth $500,000?
My condo is probably worth around $110,000.
If I sold it and paid all the expenses associated with selling, perhaps I would walk away with somewhere around $100,000.
That sounds like a nice amount of money until I remember one important detail:
I would still need somewhere to live.
If I rented an apartment for $1,500 a month, I would be spending $18,000 a year just on rent.
Suddenly, that $100,000 doesn’t look quite as impressive.
That’s why I don’t think the question is simply whether renting or owning is better in retirement.
The better question is:
What housing choices do retirees actually have when they don’t have a large investment portfolio or hundreds of thousands of dollars in home equity?
What If You’re Already Renting in Retirement?
There’s another group that gets left out of the rent-versus-own conversation entirely.
What about retirees who don’t own a home?
There is no $500,000 house to sell. There may be no home equity at all.
They’re already paying $1,500, $1,800 or $2,000 a month in rent, and now they’re trying to make that payment on retirement income.
For someone trying to live primarily on Social Security, housing can quickly become the largest problem in the budget.
I’ve written before about the choices I’ve made to keep my own expenses low in retirement. Those choices matter. But you can cancel subscriptions, eat out less and watch what you spend at the grocery store only so much.
Housing is different.
Saving $20 here and $50 there doesn’t solve a $2,000 monthly rent payment.
So what are the alternatives?
1. Stay Where You Are
This may be the least exciting retirement housing option on the list.
It may also be the most realistic.
If you own a modest home with a low mortgage—or no mortgage at all—it can be extremely difficult to replace your current housing for the same monthly cost.
That’s something I’ve discovered in my own life.
I live in a small condo. It’s not necessarily where I would choose to live if money weren’t part of the equation. But every time I look at alternatives, I come back to the same problem:
I can’t replace what I have for what I’m paying now.
That is one of the realities of downsizing in retirement. Downsizing doesn’t automatically mean spending less.
You can sell a larger or less desirable home and discover that the smaller place you actually want costs just as much—or more.
Sometimes staying put isn’t about loving where you live.
It’s about recognizing the financial value of what you already have.
2. Move Somewhere With a Lower Cost of Living
“Move somewhere cheaper” is another popular piece of retirement advice.
And there is some truth to it.
Housing costs vary tremendously from one part of the country to another. Moving from an expensive metropolitan area to a smaller city or rural area can reduce housing costs.
But there’s an important distinction:
Cheaper doesn’t necessarily mean cheap.
Maybe you can reduce your rent from $1,800 to $1,300.
That’s meaningful savings.
But $1,300 a month is still $15,600 a year.
You also have to consider what you’re leaving behind.
Family.
Friends.
Doctors.
Activities.
Familiar surroundings.
Possibly even a part-time job or other source of income.
Moving hundreds of miles to save a few hundred dollars a month might make financial sense on paper without making much sense for the life you actually want to live.
Retirement shouldn’t become an endless exercise in finding the absolute cheapest way to stay alive.
3. Buy a Manufactured or Mobile Home
Manufactured homes can look like an obvious solution to expensive retirement housing.
You may find homes advertised for a fraction of what a traditional house costs.
But the purchase price doesn’t always tell the entire story.
If the manufactured home sits on rented land, you’ll have lot rent in addition to the cost of purchasing the home.
That monthly lot rent can increase over time.
There may also be community fees, utilities, insurance and maintenance.
None of that means a manufactured home is a bad retirement choice.
For the right person in the right community, it could be an excellent one.
The important thing is to calculate the total monthly housing cost, not just look at the attractive purchase price.
4. Live in an RV or Camper
Another alternative is using an RV or camper as a permanent home.
I’m not necessarily talking about traveling across the country full-time.
Some retirees purchase an RV or camper, place it in a campground and live there permanently or for much of the year.
That can dramatically reduce the amount of money required to purchase a home.
But again, it isn’t free housing.
There’s the initial cost of the RV or camper, campground fees, utilities, insurance, maintenance and repairs.
And there’s the obvious lifestyle question:
Do you actually want to live in an RV?
Some people would love it.
Others would last about three days.
The important thing is that it is a legitimate housing alternative worth considering rather than assuming a traditional house, condo or apartment are the only choices.
5. Look at 55+ Communities
Age-restricted communities can offer several types of housing, including apartments, condominiums and manufactured homes.
Some can be surprisingly affordable.
But this is another situation where it’s important to look beyond the advertised price.
A condo that seems inexpensive may have a substantial HOA fee.
A manufactured home may have lot rent.
There may be additional community fees or assessments.
Before deciding that a 55+ community is affordable, I’d want to know exactly what my total monthly cost would be and how those costs have changed over the past several years.
6. Investigate Income-Based Senior Housing
For retirees with limited income, subsidized or income-based senior housing may be one of the few options that can make a dramatic difference.
Depending on the program, rent may be tied to income rather than local market rates.
The obvious problem is availability.
There can be eligibility requirements and waiting lists, particularly in areas where affordable housing is already scarce.
Still, someone struggling to pay market-rate rent on Social Security shouldn’t automatically assume that the advertised rents on apartment websites are their only options.
Local housing authorities and senior-service organizations can be worth contacting to find out what programs are available.
7. Share Housing
From a purely financial standpoint, this one makes a lot of sense.
Two people sharing a house can also share the rent, utilities and many other household expenses.
For retirees living alone, that could substantially reduce housing costs.
Of course, there’s another side to the equation.
You have a roommate.
Personally, I retired so I wouldn’t have to deal with people all day. I’m not entirely sure I want to come home and discover one living in my kitchen.
But that’s me.
For someone who enjoys having other people around—or two friends who are comfortable living together—shared housing could solve both a financial problem and some of the isolation that can come with living alone.
8. Move to Another Country
Moving abroad gets a lot of attention in retirement circles because there are countries where housing and everyday expenses can be considerably less expensive than in the United States.
It’s an option I find interesting.
But I don’t think it should be presented as a simple financial hack.
Moving to another country means dealing with residency or visa requirements, healthcare, taxes, possibly another language and a completely different culture.
It can also mean living thousands of miles from family and friends.
For someone who already wants an international lifestyle, the lower cost of living may be an additional benefit.
Moving to another country solely because you can’t afford housing at home is a much bigger decision.
Maybe the Best Financial Choice Is Doing Nothing
After going through all of these retirement housing alternatives, I keep coming back to the least exciting one.
Stay where you are.
That doesn’t necessarily mean staying forever.
It doesn’t mean giving up on wanting something different.
But sometimes the housing you already have is an asset in a way that doesn’t show up on your bank statement.
If I sold my condo, I’d have approximately $100,000 to do something else with.
But I’d also lose an affordable place to live.
That’s an important part of the calculation.
The question isn’t simply:
How much money can I get by selling my home?
It’s also:
How much will it cost me to replace it?
For retirees without enormous portfolios, that second question may matter a lot more than the first.
It’s one reason I’ve become increasingly interested in living smaller rather than simply accumulating more. Keeping fixed expenses manageable gives you choices elsewhere in your retirement budget.
Renting in Retirement Isn’t Bad Advice
I don’t think the people recommending renting in retirement are necessarily wrong.
If I owned a paid-off $500,000 house and had a healthy retirement portfolio, I might reach exactly the same conclusion.
Sell it.
Invest the equity.
Let somebody else worry about the roof.
Enjoy the flexibility of renting.
I’d seriously consider it.
But that’s not everyone’s retirement.
Somebody owns a $100,000 home.
Somebody still has a mortgage.
Somebody owns nothing and is already paying market-rate rent.
Somebody is trying to make Social Security cover housing, food, healthcare, transportation and everything else.
Those retirees need housing solutions too.
And telling them to sell their $500,000 house isn’t particularly helpful when that house doesn’t exist.
There Are Plenty of Places to Live. There Just Aren’t Many Cheap Ones.
Maybe that’s the uncomfortable conclusion.
There isn’t one best housing choice for retirement.
Renting can be great if you can afford it.
Owning can provide tremendous financial security if your housing costs are low.
A manufactured home, RV, 55+ community, smaller city, shared house or even another country might work for somebody else.
And for many retirees, the best financial decision may simply be staying exactly where they are.
Not because it’s their dream home.
Not because it’s where they always imagined spending retirement.
But because they can’t replace it for what they’re currently paying.
That’s a retirement reality I think deserves a lot more attention.
What about you?
Are you retired and renting? Do you own your home? Have rising housing costs changed your retirement plans? Or have you found an affordable housing alternative that actually works?
I’d especially like to hear from people who found an option I haven’t considered. Your solution might be exactly what somebody else reading this needs to hear.
