Five Times Renting in Retirement Makes More Sense than Owning

Homeownership is usually treated as the finish line. You pay off the mortgage, you stay put and your housing costs drop to taxes, insurance and upkeep. For many retirees, that's still the right plan.

But a growing number of older Americans are choosing to rent instead. Between 2013 and 2023, the number of renters aged 65 and older grew by 2.4 million, a nearly 30% increase and the largest jump of any age group, according to a Point2-Homes analysis of census data. More than 10.4 million older adults now rent their homes.

Some of those renters had no choice. But many are homeowners who sold on purpose. Here are the situations where renting in retirement makes real financial sense, and the situations where it doesn't.

1. You're Relocating

This is the clearest case, and money expert Clark Howard has a firm rule about it is you should always rent first for six months, a year or even two years if you're thinking about relocating for retirement.

Clark says, "If it turns out that you don't like it, at least you're not all-in owning a home that you've now got to get rid of."

A place that's wonderful to visit in March can feel very different in August. The neighbors, the traffic, the health care options, the distance from your kids: none of that shows up in a listing. Renting buys you time to find out whether the move actually fits your life before you commit hundreds of thousands of dollars to it.

If you sell your old home to fund the move, renting also lets you park the proceeds somewhere safe while you decide, instead of rushing into a purchase in an unfamiliar market.

2. You Want to Live in More than One Place

If your retirement plans include spending winters in Florida and summers up north, or slow-traveling for months at a time, owning can work against you. An empty house still generates insurance bills, maintenance needs and worry.

Renting gives you flexibility that ownership can't match. You can sign a shorter lease, go month-to-month or simply not renew when your plans change. For snowbirds, renting on at least one end of the migration often costs less than carrying two properties, and it eliminates the 2 a.m. phone call about a burst pipe in a house 1,000 miles away.

3. Your Home is Costing More than You Think

"Renting is throwing money away" is the most common objection to this whole idea. But owning a home free and clear doesn't mean living there is free.

A 2025 analysis from Zillow and Thumbtack found that insurance, maintenance and property taxes cost the average homeowner $15,979 per year, about $1,325 a month on top of any mortgage payment.

Homeowners insurance premiums alone have surged 48% in five years. Bankrate ran a broader version of the same math, adding utilities and Internet, and put the annual cost of owning a single-family home at more than $21,000.

The squeeze is hitting retirees hard. Harvard's Joint Center for Housing Studies found that 7.9 million homeowners ages 65 and older were cost-burdened as of 2023, meaning housing ate more than 30% of their income. That's more than one in four older homeowners.

If your property taxes and insurance keep climbing while your income doesn't, selling can convert an expensive asset into income-producing savings. Thanks to the capital gains exclusion, a married couple can shield up to $500,000 in profit on the sale of a primary residence from taxes ($250,000 for singles), as long as they owned and lived in the home for at least two of the last five years.

When invested conservatively, the proceeds from a home sale can cover many rent checks.

Before you decide, run your own numbers. Add up what your home actually costs you each year in taxes, insurance, utilities, maintenance and repairs, then compare that to the annual rent on a place you'd be happy living in. The gap is often smaller than people expect, and sometimes it runs the other way.

4. You're Done with Maintenance

There's a physical side to this decision that spreadsheets miss. Homes demand labor: gutters, lawns, ladders, filters, roofs, storm prep. At some point, that work stops being satisfying and starts being a burden or a safety risk.

You can pay someone to do all of it, but that's exactly the point. Once you're outsourcing the maintenance anyway, you're paying homeowner prices for a renter's lifestyle. When the water heater dies in a rental, it's a phone call, not a $1,800 check.

5. You Expect Another Move within a Few Years

Buying only pays off if you stay long enough for appreciation to overcome the transaction costs, which typically run 8% to 10% of the home's value once you count commissions, closing costs and moving expenses on both ends.

If there's a decent chance you'll relocate again within five years, whether to be near grandchildren, to downsize further or to move into a retirement community with more support, renting keeps you nimble. You avoid paying those transaction costs twice in a short window, and you're never stuck waiting for a house to sell before you can make your next move.

When Renting in Retirement Is a Mistake

Renting is not automatically the smarter play. A few situations where staying an owner usually wins.

• You have a paid-off home with modest carrying costs. If your taxes and insurance are reasonable and the house still fits your life, your effective housing cost is likely lower than any rent you'd find. That stability is worth a lot on a fixed income.

• You'd struggle with rent increases. A landlord can raise your rent every year, and in most states there's no cap. Owners with a paid-off home or a fixed-rate mortgage are insulated from housing inflation in a way renters never are.

• You want control over your housing. A landlord can decide to sell, decline to renew your lease or let the property decline. Moving is disruptive and expensive at any age, and more so later in life. If being forced to move on someone else's timeline would be a hardship, ownership protects you from it.

• Your home is a core part of your estate plan. A home passed to heirs gets a step-up in cost basis, which can wipe out decades of taxable appreciation. If leaving the house to your kids matters to you, selling it gives that up.

Will a Landlord Rent to You without a Paycheck?

One practical worry keeps many retirees from considering this at all. If your income is Social Security and investment withdrawals rather than a salary, will landlords turn you away?

Clark says no. "They're not going to hassle you at all, because they know that that Social Security check comes every month, whereas a paycheck can stop at any time for any reason."

Beyond steady income, the thing landlords care about most is your credit. Keep it in good shape, be ready to document your sources of income, and you'll be a stronger applicant than most people with jobs.

Final Thoughts

For many people, owning a home in retirement is still the goal – and if you have a paid-off home that fits your budget and your lifestyle, it can be a source of emotional and financial security.

But retirement is also a season of life where flexibility matters.

Before you make a decision, don't rely on assumptions like "renting is throwing money away" or "owning is always better." Run the numbers based on your actual situation, including taxes, insurance, maintenance, repairs and the opportunity cost of the money tied up in your home.

Clark.com's Rent vs. Buy Calculator can help you compare the costs and see which option makes the most sense for you.

The right answer may be staying in the home you love. It may be downsizing. Or it may be renting somewhere new while you enjoy a simpler, more flexible retirement.

Clark Howard is a consumer advocate who focuses on saving more, spending less and avoiding getting ripped off. In addition to a nationally syndicated radio show, his website http://www.clark.com features articles and advice as well as podcasts and videos.