Where to live? Rent or Buy? These questions become more significant for those who are preparing for their retirement. Most of the home owners decide to downsize their living space or relocate to an entirely new location. They go with the one that makes more financial sense. If you have a mortgage, paying the mortgage requires regular income; you have no choice but rent a house. Practically there is no definite answer that would suit all the retirees because there are many factors to consider before buying or renting your retirement home.
You should only own a home in retirement, if after the mortgage is paid off, the value of your home is not greater than 30 percent of your total retirement assets as home ownerships offers both financial and emotional security. It always ensures that always have a roof over your head, and it can serve as another long-term investment. With the availability of reverse mortgages for seniors over age 62, keeping your paid-off home will provide you with an opportunity to continue to live independently rather than move in with children. This definitely causes you less than renting. You have several benefits with home ownership.
Whereas when you rent in retirement, you can always increase your retirement income, by simply finding cheaper rental housing. Your monthly rent will cost you less than your mortgage, and you will additionally have the liquid equity to add to your retirement portfolio. Your monthly rent will cost you less than your mortgage, and you will additionally have the liquid equity to add to your retirement portfolio. You will not to calculate the property tax, and cost of maintaining your property. Renting a home in retirement gives you less financial trouble. Even if you do own your home, renting might make sense when you can’t handle the maintenance cost. This option gives you the flexibility to move to their chosen retirement destination. Renting a home tends to be less financially stable.