Article Bookmarked
Bookmark Removed

Is it better to buy or rent in retirement?


Apr. 21, 2016 CNN Money

Nationwide, it usually makes more financial sense to buy a home than rent. But it’s a little more complicated for those in their golden years.

Retirees also need to decide whether they want to leave an inheritance behind — a key factor in the rent vs. buy decision.

If a retiree does not plan to pass the home on to heirs, it’s nearly always cheaper to rent than to buy, according to a report from Trulia.

That’s because building equity is one of the biggest factors that favors purchasing a home. But if there are no plans to leave the home behind, or buy another home, it usually makes more financial sense to rent.

“The value of that equity matters a lot when making the decision. If you don’t care whether that value will be around when the house is sold, it might be a better deal to rent.” said Ralph McLaughlin, Trulia’s chief economist.

Out of the 100 cities with the highest population of people 65 and older, renting made more financial sense in 98 of the cities, for those not considering leaving the home equity as inheritance.

To calculate the savings of buying versus renting in retirement, Trulia assumed buyers were in a 15% tax bracket and would stay in the home for 15 years.

The Villages, Florida, and Danville, Virginia, were the only two places where it made more sense to buy, even when home equity wasn’t a factor. It would be 14% cheaper to buy a place in The Villages, where the median home price is $250,019, and 7% cheaper to rent in Danville.

Homes are very affordable in Danville, with the median home price coming in around $65,000, according to McLaughin.

“That makes a mortgage peanuts compared to the rent, which is about $850 a month.”

Read More on CNN Money

Gene Upshaw Player Assistance Trust Fund

Apply Today

All Resources

Tell Me More

Someone Took Out a Loan in Your Name. Now What?

Identity theft wears many different faces.

Read More

What Happens When You Get Evicted?

The CDCs eviction moratorium has been blocked.

Read More

How to Manage Unexpected Medical Bills

Former Players with mounting medical bills may find support with the PAF.

Read More

The Five Pillars of Great Credit

Whether you are building credit or maintaining it, here are some key pointers.

Read More

The Minor Change That Made My Marriage So Much Better

As these men can attest, small adjustments can make a big difference.

Read More

Let’s Redefine “Productivity” for the Hybrid Era

Incorporating innovation, creativity and collaboration is a must.

Read More

Recovering from sleep deprivation takes longer than expected

Catch-up sleep is not an efficient way to counteract sleep restriction.

Read More

What We Really Talk about When We Talk about Self-Help

On the politics of self-improvement.

Read More