Here’s Why Owning a Home in Retirement May Be the Wrong Choice

The classic version of the American dream has all sorts of subtexts and assumptions built into it. For example, we should all want to own a home -- because paying into somebody else’s equity is for chumps. And for true financial security, we should aim to have that home’s mortgage paid off by the time we retire, so that we’re basically living rent-free in our golden years. Sounds smart, except those assumptions aren’t always correct.

To cut through the mist around this myth, and others, Motley Fool Answers hosts Alison Southwick and Robert Brokamp brought in personal finance writer Maurie Backman. In this segment of the podcast, she runs through some reasons why many of us would be well advised to become renters in retirement.
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[melissa-qutf]

These young people....they must think once you retire you soon will die and do not consider 30 or more years of living and paying increased rents into consideration. Rent has tripled at the very least in the last 30 years.

[jorasparents]

Totally agree. Aside from the expense issue, there is a peace-of-mind benefit from renting that cannot be quantified in terms of dollars, imo. People like to say they own their home "free and clear" once they pay off a mortgage, but even then, there are plenty of expenses like property taxes, insurance, and REPAIRS and upkeep that can quickly derail you. Plus me personally, I LOVE the idea of being able to move if the area I'm in changes drastically or even if I don't like my neighbors (lol). Can't do that easily if you own (selling and then buying another home is no walk in the park). I cannot WAIT to leave behind the continual costs of upkeep and repairs (not to mention the looming wonder of when the next repair will be needed). Super convenient. I agree it's not right for all (probably varies a lot based on where you live and the COL in your area) -- but it's refreshing to hear someone actually say renting may be a better option -- not just for retirement, but overall. (I also think the "building equity" argument is flawed since those equations don't seem to take into account the years of taxes, insurance, and repair costs ... just the buy and sell prices, which is horribly inaccurate.) I DO agree that it's certainly ALWAYS more beneficial for the mortgage industry for people to own. ;-)

[allthingsnu]

I'm older now but I remember renting apartments when I was in my 20s. It didn't take long for me to get sick of coming home from work to find a letter on my door notifying me of a rent increase. I knew then that I would buy a home and I did. My mortgage is paid off now. I plan to replace my roof and make some other improvements around the time I retire so that I can enjoy my paid-for home for the rest of my life. I know that different things work for different people, but I can't imagine being out there vulnerable to landlords who can raise my rent as much as they want whenever they want.

[BeagleAD]

Well my co workers rent are higher than my mortgage. My house is larger than their apartment unit. Lately the rent increase are sometimes over 100%.

[chuckbarklow]

Worst advice I’ve ever heard. Unbelievable

[penttimuhli]

well you wouldn't want to be still paying off a mortgage when retired, if you have paid off your home then the money saved from not paying on mortgage repayments can then be used for repairs etc.
This is complete rubbish, if you rent you can be kicked out anytime the landlord decides

[LisaSoulLevelHealing]

These ladies are wrong.
Owning a home OUTRIGHT is the goal. Meaning, you paid it off.

That's way more important than and 401k plan.

Lady was so wrong on this

[JS-jhcy]

So what next, Living in a van or dog house

[tonychavez]

She doesn't know what she is talking about

[griffin]

Every persons situation is different, there are no cookie cutter solutions.I see people here thinking it is a horrible idea, but think it through, we have taxes, less write offs, utilities which are acting like taxes these days like (water, sewage, electric and gas) We have general maintenence, major repairs come up like roofs, water tanks, heating and cooling systems the list goes on.
Selling our homes and keeping a cheap vacation property or just selling all and having a turnkey apartment so we can travel are options we are weighing.
It all depends on each persons situation and what they want or can do.

[kerrytoby]

It's a personal choice if you have the option. Some people prefer it. Some don't want to rent and some want a house and yard as well.

[dacianbonta]

put yourself at the mercy of Blackrock & Co because your roof may leak, or "something"
talk about trading a dollar for a quarter

[mikeaccount]

Bologna. Owning a home and just paying property taxes will leave extra money for “roofs leaking”. 1-1.5k in rent may just be all of SS and retirement funds. Renting also isn’t just “fixed”. It often gets raised.

[neptasur]

I'd rather have housing costs that are low and variable than high and consistent.

[shirleychavez]

We are also looking at increases in home insurance, property taxes, maintenance, possible health issues, etc. it's a lot of responsibility to own a home. I'm currently thinking of selling and renting. I want to be free to travel without worrying about who's going to watch over my house while I'm gone.

[videobrownsville]

Your argument doesn't hold water ..a leaky roof or a bad air conditioner should be budgeted maintenance items. It's like saying I'd rather make car payments instead of fixing my car😢

[jpaul]

I don’t agree with her, owning home is better just pay off home or just have a small balance just enough for tax purpose, that’s my plan, but I don’t understand people renting all their working years, than retire buy a house, you will be in your 60s u have what have, don’t take money out to put 20% down or buy house cash, enjoy enjoy your money & retirement

[sbkpilot]

strange way to look at it... your rent could rise sharply with inflation at the end of your lease as well similar to what is happening now, the thing is that you can't keep moving your residence every time your landlord decides to jack up the rent 10-20% or whatever, that is incredibly disruptive... much more than your roof leaking.

[anniesue]

Everyone would love us to dump our houses on the market and then pay rent. I dont think so.

[itguru]

I agree because maintenance on a home at 80 is ridiculous