Can Millennials Afford To Retire If They Never Own a Home?

Real estate agent showing a house for sale to a happy couple  - home ownership concepts.
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Homeownership has traditionally been thought of as an essential financial milestone, but not every millennial can — or wants to — achieve it. According to the latest Census Bureau data, just over 50% of millennials are now homeowners — which means that nearly half are not.

If half of millennials never own homes, how will this affect their ability to retire? Although retirement is still a couple of decades away or more for this generation, planning for this phase of life should be well underway, and not attaining this large asset can possibly throw a wrench into long-term plans.

GOBankingRates spoke to financial experts to get their insights on how not owning a home can impact millennials’ ability to retire, and what they can do to compensate.

It’s Possible To Retire Comfortably Without Ever Owning a Home

Jay Zigmont, Ph.D., CFP, founder of Childfree Wealth, said that times have changed and owning a home is no longer a financial necessity.

“While owning a home used to be one of the core pillars of retirement planning, it is now an optional component,” he said. “Part of the reason why houses used to be part of a retirement plan is that people would buy one house, pay it off and stay in it through retirement. In the current housing market, it is rare that someone is going to stay in the same house throughout their life and into retirement, so the basic assumption is off.”

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He also notes that buying a home doesn’t automatically put you in better financial standing than someone who rents.

“Housing affordability is a big issue for most of the U.S., and buying a house does not automatically fix that,” Zigmont said. “With the new 40-year mortgages, it may be that people never pay off their house in their lifetime.”

Timothy Hewitt, CFP, vice president and financial advisor at Wealth Enhancement Group, also believes that it’s possible for millennials to retire without ever owning a home.

“Although home ownership has been linked to the ‘American dream,’ we are seeing some clients forgo home ownership in favor of renting,” he said. “There are plenty of tax benefits to homeownership, but you want to ensure that your lifestyle aligns with this goal. Conversely, there are potential negatives to consider, such as staying in one place for a longer period of time, managing or outsourcing the maintenance and repairs required with homeownership, and choosing a home that will appreciate in value based on the location and amenities.”

How To Plan for Retirement as a Renter

You can retire comfortably as a renter, though it may take some extra planning, Zigmont said.

“You need to plan on rental increases and the monthly expense,” he said. “Rather than investing in owning a home, the money you would have spent could be invested in the stock market or REITs if you want real estate exposure.”

Scott Lieberman, founder of, said that if you do not own a home, it’s a good idea to own another valuable asset, such as your own business.

“Ownership is indisputably a key to wealth,” he said. “Millennials might go down the path of stock ownership or business ownership instead of home ownership. I have two friends who retired by age 50 and neither owns a home. One sold his successful business and lives off interest. Another made wise investments in the stock market over many years.”

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