Is it Better for Retirees to Rent or Buy a Home?

Is it Better for Retirees to Rent or Buy a HomeWhen you’ve reached the age of retirement, you might be considering downsizing, moving to another town, or buying a new home. While all the options are feasible, it is recommended that you look at the financial benefits and disadvantages of both buying and renting before making an informed decision. When you’ve made your selection, be sure to protect your new nest with a Connecticut Homeowners Insurance Program to reduce the risk of loss and curb financial burden.

The advantages of renting include more flexibility, no maintenance costs, and steering clear of increasing housing expenses. While rent prices do increase, they must remain competitive. By contrast, homeowners association fees can raise significantly based on the costs of maintaining and upgrading the property, says Kiplinger.

While some might object to “throwing away money” each month on rent, home ownership comes with a fair share of additional expenses, as well. Even if you were able to purchase your home outright, annual property taxes and homeowners insurance must be paid.

Purchasing a home also requires all of the money to be tied into one place. Unfortunately, Dave Yeske, a certified financial planner in San Francisco, states “Short of selling your condo, the only way to access the equity if by paying the lender for the privilege.” However, if you plan on staying in your new home for approximately five years, it may be worth it to buy.

Another consideration to make is taxes. While home ownership allows a mortgage interest deduction to apply to your tax returns, this wouldn’t even apply if you were downsizing and paid in cash from the sale of your current home.

In order to determine the best option for yourself, consider using a rent-versus-buy calculator. Fill in the variables and identify the cost benefits of each choice, and don’t forget to add in the money you make from any investments and any additional cash you will make when selling your current home.

At Byrnes Agency, we want to ensure your transition to retirement goes as smoothly as possible. Our comprehensive homeowner and condo insurance programs are written specifically with you in mind and can be tailored to match a variety of requests. For more information, contact us today at one of our three locations.

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Dayville Office

Phone: (860) 774-8549
394 Lake Rd
Dayville, CT 06241
United States
info@byrnesagency.com
Hours of Operation: Monday- Friday 9:00am-5:00pm

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Norwich Office

Phone: (860) 886-5498
6 Consumers Avenue
Norwich, CT 06360
United States
info@byrnesagency.com
Hours of Operation: Monday- Friday 9:00am-5:00pm

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Woodstock Office

Phone: (860) 928-7928
1226 Connecticut 169
Woodstock, CT 06281
United States
info@byrnesagency.com
Hours of Operation: Monday- Friday 9:00am-5:00pm

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