3 Things To Do If You’re Planning To Rent in Retirement

Ridofranz / iStock.com

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

Retirement planning comes with no shortage of challenges, including securing a long-term income, accounting for unpredictable healthcare costs and mentally preparing for the amount of free time you’ll have.

If you’ve paid off your mortgage and are comfortable with your home, you don’t have to worry much about your living conditions. However, renters must wrestle with the idea that their rent can and likely will rise, making it extremely difficult to predict long-term expenses.

Renting vs. Owning in Retirement

On the surface, it may seem like homeowners without a mortgage have it better than renters. However, there are advantages and disadvantages to both. Knowing both sides can help you determine which is best for your lifestyle.

Owning 

One of the biggest benefits of owning property when entering retirement is the predictability. Even if you haven’t completely paid off your mortgage, you will have regular monthly payments that make it easier to plan years down the line. Your payments will also help build equity and create a more stable future. 

On the downside, because you own the property, you’ll be responsible for maintenance. As you age, it will become more difficult to perform tasks on your own, causing costs to go up as you hire help. Other homeowner duties, such as mowing the lawn and performing seasonal upkeep, may become more of a hassle and expense over time.

Renting

The U.S. Bureau of Labor Statistics reports that the most common rental contract lasts 12 months, meaning your payment agreement will remain locked in for a full year However, there is no guarantee that your next contract will remain the same the following year. This makes it difficult to predict how much you’ll need to spend on housing five, 10 or 20 years down the line. 

While it can be difficult to plan for rising rent prices, if your landlord suddenly decides to sell the property, you may have to find a more expensive place to live. On the other hand, renting also means you’ve got flexibility. If you decide you want to relocate, downsize or find a place with more accessibility, it’s much easier to do than selling your home.

How To Prepare For Rising Rent Costs

In 2024, the annual rent for U.S. citizens rose by 5.11% on average, and early results from 2025 showed another 4.09% jump. While this may seem dramatic, the average increase per year from 2000 to the beginning of 2025 has been 3.67%. Despite the rise in cost, it is possible to prepare for it and live comfortably if you use the right strategy.

1. Create an Emergency Fund

Emergency funds are reserves of money you can put toward unexpected expenses, such as medical emergencies, car repairs or periods of unemployment. These funds can keep you out of debt in the event of an emergency. However, you can create an emergency fund to prepare for rental price hikes as well. Having an extra six months to a year’s worth of rent on hand will give you the freedom you need to live comfortably.

2. Downsize

Another option to combat rising costs is to get a cheaper rental. Usually, finding a more affordable place to live means giving up some of the space and amenities that you’re used to. However, as you get older, this may be an upside. Having a smaller home to maintain can mean less stress and an easier daily routine. On top of that, it’ll save you money. 

3. Get a Long-Term Rental Contract

Not every rental contract is yearly. Some landlords allow you to negotiate a longer lease that can span two or more years. Locking in a long-term contract can give you stability and stress relief. At the same time, your landlord won’t need to worry about finding new tenants for the duration of the lease. The risk is that if rent prices in the market drop, you are stuck paying the same amount. It’s also more difficult to get out of the contract if you want to move or downsize.

Share This Article: