Retirement Planning: 6 Alternatives To Buying a House in Your Golden Years
Written by
Yaël Bizouati-Kennedy
Edited by
Cory Dudak
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Buying a house in retirement might be a dream for many Americans, but difficult to achieve due to various factors. Not only have inflation and soaring rates — which affect everything from credit cards to loans — put a dent in retirement savings, but high home prices and exploding mortgage rates are also making it very difficult.
Yet, experts say there are several alternatives to buying a house in your golden years, alleviating financial burdens for a comfortable quality of life.
Let’s dig a little deeper into some options for housing during your golden years:
Renting
Jay Zigmont, PhD, MBA, CFP and founder of Childfree Wealth, noted that as you age, your housing needs change. For most, the days of paying off a house and living there until you die are long gone.
“Unless you truly enjoy maintaining a house, and are physically able, renting may be a better choice for you,” Zigmont said. “You want a place where you can age safely and have as much support (or as little) as you want.”
Zigmont added that places like the Villages on Morehead are his “current favorites for aging with grace and comfort.”
“They offer high-end apartments with all the support you need. When you first get there you might use their dining and concierge services while later you might use transportation and care. It is not cheap but it is nice,” he added.
Michael Micheletti, an equity and housing expert and chief communications officer of Unlock Technologies, echoed the sentiment, saying if you live in an expensive market, consider a more affordable suburb.
“In other words, you don’t have to move to a small rural town in another part of the county,” he added.
Airbnb or VRBO
Another option can be to rent via platforms such as Airbnb or VRBO.
With high interest rates and general home and rental affordability decreasing, Chris Urban, founder of Discovery Wealth Planning, added that it gives people opportunities to try out different locations to see if it’s somewhere they would want to settle down.
“Maybe you enjoy being down south in the winter and up north in the summer or perhaps traveling internationally and doing so seasonally can be more comfortable,” he said. “I think renting is a great way to stay “asset light” and not tie yourself down while you are hopefully enjoying your retirement.”
Retirement Living Communities
As Matthew R. Silverhardt CFP, CFA, private wealth advisor and manager at Claire Reid Wealth Advisory, argued, retirees looking to simplify their financial obligations and reduce stress should avoid buying new homes.
For those who prefer more structured retirement living, relocating to active adult communities or senior living facilities remains a popular choice.
“These communities provide amenities, maintenance-free living, and opportunities for social interaction and recreational activities tailored to retirees’ needs and interests,” he said.
Shared Housing
This is where a non-home-owning older adult moves into housing owned by others and contributes money toward shared living costs.
“Someone else is the homeowner, however, and has major responsibility for maintenance and upkeep,” said Barbara O’Neill, Ph.D., CFP, AFC, CRPC, expert contributor for Annuity.org. “The people that older adults might move in with could be family members- such as children, grandchildren, siblings- or friends (think: The Golden Girls).”
And this trend is picking up steam, as noted in Opendoor’s 2024 First-time Homebuyer Report, as more than 3 in 4 first-time buyers purchased their home with someone else in 202, with 11% buying with friends.
RV’ing It
If you’re not really excited about the idea of downsizing your home or moving into a retirement home, you do have alternatives- you can also try traveling the country.
“Spending time in an RV can be a great way to see the country, especially if camping is a pastime of yours. An RV can be a cheap way to really do some exploring,” said Scott Lieberman, founder of Touchdown Money.
Move to a Cruise Ship
Lieberman also noted that if you can see the country, why not see the world?
“A cruise ship can be cheaper than some living areas, and all of your expenses are covered,” he said. “It’s unorthodox, but it can be a lot of fun and a financially sound decision.”
This can be much cheaper than moving to a retirement home. Living in an independent living community can cost from $1,500 to $4,000 a month, and seniors residing in assisted living facilities have a monthly average cost ranging from $3,500 to $10,500 a month, according to AssistedLiving.org.
For instance, Seattle couple Angelyn and Richard Burk said this ended up being much cheaper for them than a mortgage, according to CNN. Indeed, the average cost per day of living on a cruise ship was $89, which included the price of their room, food, entertainment, transportation, tips, port fees and taxes, which is “well within our retirement budget.”
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