You’re Retired. Should You Rent or Buy Your Home? (Published 2020) (2024)

In 2015, after her husband died, Merrily Hardisty decided she no longer needed the space or the maintenance hassles of their four-bedroom house in Bethesda, Md., a Washington suburb. Like many older people who downsize, Ms. Hardisty faced another decision: Should she buy a new place or rent one?

Ms. Hardisty moved two years later to a condominium community not far away, but instead of buying a unit, she rented a three-bedroom. When her lease expired, Ms. Hardisty, 75, signed a three-year lease on another apartment, with two bedrooms and a den, in the same complex. She moved in December and pays $2,950 a month plus electricity.

A comparable condo in the community runs close to $550,000, plus a monthly maintenance fee of $1,300 and about $500 a month in property taxes. Ms. Hardisty said she preferred to invest her take from the sale of her house — roughly $500,000.

Her rent is covered by income from the investments, a survivor pension from her husband’s government job, Social Security and profits from the sale of unimproved lots her husband owned. The extra cash she reaped from the sale also allows her to pursue her retirement dreams: travel overseas and a planned Disney cruise with her daughter and son, their spouses and her two grandchildren.

She said most of her widowed friends were renting, too. “The thought of putting down a large amount of money is a major reason why my friends and I decided to go the rent route,” Ms. Hardisty said.

What are your goals?

Though most older people prefer to stay put, many others who own houses in the suburbs are trading in the stairs, the unused rooms and sometimes the headaches of lawn care for something more manageable. Once they decide to downsize, retirees should weigh the emotional and financial factors of renting or buying their next home.