Deb Federico

Berkshire Hathaway HomeServices

Verani Realty,

Office: (603)472-1010 

Cell: (603)321-4777



Stay, Downsize, or Rent? Your Options in Retirement

Like many you are ready to retire and you are wondering if you should stay in your current home or sell.  While it may feel daunting, you are not alone.  I have worked with many people on the cusp of retirement who are thinking of downsizing, moving to a warmer state relocating closer to family.  Everyone’s thoughts for the future are different but at this stage in life it’s more important than ever to have a plan.

There is usually one major question when making the decision to retire: how much money will we need?   This question may seem intimidating, but there are resouces to support you as you create a budget for your retirement years. First and foremost, speaking to a financial advisor will help you make decisions for your future.  Another way to determine your budget is to make a plan for your home. Where you live will impact your retirement funds, so it is vital to start thinking about your options now.  Here, you have a few choices: 

  • Stay in your current home
  • Downsize  
  • Rent 

       Let’s take a closer look at these options together.

Staying In Your Current Home

If you have always owned your own home, continuing to own may be a more comfortable option for you.  Some reasons to keep your current home might be:

  • You own it outright and major systems and repairs have been updated fairly recently.
  • The layout and size will accommodate you as you age. (ie. One level or small home and manageable yard)
  • You are planning to pass the home down to the next generation.
  • You have family members that are moving back in.

If you own your home outright, there are many expenses to consider, such as property taxes, insurance and maintenance.  Some property taxes can be as financially crippling as a mortgage, and you will need to budget for maintenance costs.   

To get a good ball park figure, use at least 1% of you home value each year to estimate how much you might spend for maintenance.  Additionally, make sure you have updated any major systems fairly recently.  Have your home inspected to catch any red flags such as septic failure or roof damage. It’s better to pay for major repairs while you are still working rather than waiting until you are on a fixed income.  Moreover, if you choose to sell, you may still need to pay for:

  • An updated roof, if it’s damaged or beyond its life expectancy
  • Septic system or leach field if it fails 
  • Heating system, if your current one is not working properly 

These repairs may be necessary to make your home more marketable.

If your home is not currently updated to suit your needs, or if the space is not built to accommodate you as you age, there is another option for owning a home in which you can comforably retire!


Having a smaller home saves on utility costs.   It’s easier to maintain and if it’s one level you can age in place.  There are also many age restricted developments to accommodate retirees if you are looking for quiet communities with no yard maintenance.  Some even have great amenities-everything from planned social gatherings to pools and golf.  

One thing to bear in mind with this option is that downsizing shouldn’t be a stretch on your finances.  If you are planning to downsize and you can pay cash for your new home you will need enough income to maintain your home and your lifestyle.  With this in mind, taking out a small mortgage isn’t necessarily a bad thing.  Using any extra equity from your home sale to invest and produce more income could provide more freedom.   At this stage of your life your income may not increase, but your expenses will.  This could include everything from property tax and home maintenance to health care.

As with any investment, homes do not continually go up in value, and long-term planning is essential.  If you need to sell sooner than anticipated, you may not recoup your upfront costs from buying.  Selling will add additional costs and if the housing market has taken a downturn you could be selling for less than cost.  However if you are not planning to move for at least 10 years and you don’t need to increase your cash flow, owning may be the better option.    

If you are considering downsizing, have you tackled these questions?  What if you need all the equity from your house to supplement your income?  If so, will you be eligible for a reverse mortgage?  Will you have an option to move in with family?  Maybe they have extra rooms or you could financially help them add on to their existing home.  If you are not sure how to answer these questions, we are here to help you navigate that process!  Still, you do have another question to ask yourself: what about renting?  

Renting In Retirement

If you have been a long time homeowner the thought of renting could seem unappealing and perhaps scary.  Speaking personally, though, I have owned and rented.  I can tell you from experience that renting has some excellent advantages. 

Not your problem.  Things like maintenance, landscaping, and property taxes are handled by property owners, leaving you to relax and enjoy your retirement.

  • The freedom to move anywhere, at any time, without worrying about selling a house.
  • It’s potentially cheaper if your current home needs updates, major repairs or has high utility costs and/or you still have a mortgage.
  • It allows you to move to a new area, which can give you the chance to investigate a new town or city without long-term commitment.

If you are selling your home, renting may give you an opportunity to invest any equity from your home into other investments–such as stocks and bonds–creating more monthly income to live on. 

Renting also provides a consistent monthly housing expense without the shocking increase in property taxes or maintenance.  It’s true that rents can increase or the landlord can sell the property, but landlords are looking for responsible tenants and, when found, are more willing to work and negotiate with them. Additionally, if you don’t like the first place you choose, you have flexibility and freedom to leave.  As you don’t have any money invested into the property, you can move to a better rental, a bigger or smaller unit, or even a new location, whenever your lease is up.

Rental properties do come with some restrictions, though, and for previous homeowners, those restrictions can be the biggest hurdle to overcome.   You may need to get permission to hang things from walls, change the wall color, or plant a garden.  Some landlords are more open to changes on their property, so I would advise asking about any rental restrictions before you sign a lease.  Then ask to get the permission in writing.  

Renting can give you the opportunity to "try out" new locations without the large financial commitment of buying.  If mobility becomes an issue, there are age restricted rental units which will provide support as you age.

It’s helpful to know the landlord and tenant laws in each state.  If you search online for "tenant rights" in the state you are planning to move to, you can familiarize yourself with that state’s laws.  This protects you as a renter and can help make you aware of your rights in any situation.  Any of the state government links should give you accurate information.

Ultimately, retirement is a time to celebrate.  Choose the option that will provide the most financial security and peace of mind for you and if you have any questions, please know that I am here to help!  Feel free to reach me at or 603-321-4777.                               

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