“Postpone nothing,” Lynne Martin said, advising other seniors – words that ring most familiarly as more and more older Americans redefine what home could mean to them in their senior years. Already well into their 60s, Tom and Jeanne Skellan took that message about the definition of home to heart: they sold their house in Utah, where they had lived for 15 years, in 2021, and bought a place in an area called Mesa, Arizona, where the home equity that the couple had built up funded experiences rather than housing.
What is happening with the Skellans family suggests the beginning of another big trend. According to analyses by Point2Homes, based on data from the U.S. Census Bureau, the number of renter households aged 65+ has seen a steep rise of about 30 percent from 2013 to 2023, representing about 10.4 million in that bracket. Higher interest rates and home values may be making renting an attractive option, especially in the Sunbelt States of the country, such as Arizona.
Their one-story, three-bedroom rental house in Mesa cost $2,100 a month, just a little more than what they used to pay for the house. However, as far as expenses are concerned, Tom doesn’t have to worry about mowing the grass, air conditioning, and higher property taxes and insurance at all. “If we bought a house, we couldn’t afford a new one, so we’d end up getting an older one, and there might be a decent amount of expenses,” said Tom. With combined Social Security benefits of over $3,300 per month and his own retirement benefit of $2,200, they will have ample money to spend and also be able to maintain their mobile lifestyle.
This rationale of theirs suggests a rather astute understanding of house equity even at their age. “I’m not going to last 30 years, so I’m just thinking 12 to 15 years,” said Tom. Instead of borrowing again, they put some of their capital into vacations – three weeks during summer in Ireland, Saratoga Springs and Ozarks, and Italy next year celebrating their 50th wedding anniversary.
Rent crossbreeds travel in the growing trend of the elderly electing experience over ownership in the trend of rent versus own in the aging population opting for the experience of traveling rather than the ownership of a home or other properties in retirement. As noted in other articles on how to create a budget in retirement travel, a location with a lower cost of living and rewards credit cards can make all the difference in economy while traveling.
Not all seniors who rent housing, however, have incomes as high as the Skellans. In fact, according to a press release by Harvard Joint Center for Housing Studies, 58% of renter households age 65+ were cost burdened in 2023, meaning they paid more than 30% of their income for housing. Furthermore, 60% paid 50% or more of their income for housing. Disproportionately, the problem is experienced at an even greater rate as one moves forward with elderly minorities, lone seniors, and those 80+, whose incomes are generally lower with less assets in reserve.
For those doing research for their options for renting, senior communities for seniors over 55 may offer a degree of connectivity, gymnasiums and other activities. They were considered, as explained by Tim Mullaney from Senior Housing News, “a really hot part of the senior housing market right now that’s grown a lot in the last several years.” While it is true that these communities charge higher rates for their renters, these communities have a lot more to offer seniors who would like to remain active. Now, let us analyze the advantages and disadvantages for individuals who would like to rent as seniors.
The reason why they choose to sell the house may give the retiree access to the value of the house, and they won’t have to worry about maintenance. However, they would have to factor in the rising rent that they will pay annually, which would go up by an estimated 3% to 5%. Besides, they may also have to relocate in the event of a new owner of the house or rising rent. According to the comparisons offered by an expert in relation to dwelling considerations, an individual who currently owns a dwelling can contemplate the possibility of renting the house if it entails higher taxes. Furthermore, they can opt for the renting arrangement if they prefer a smaller dwelling.
For retiring individuals, especially those enthusiastic about traveling, the existing lesson from the Skellans’ experience is as follows: prioritize the flexibility in one’s finances as the paramount factor and choose a dwelling that can cater to one’s contemporary needs without extensive anticipation in terms of traveling. Instead, use the funds for something worth the effort and expense. For Lynne Martin in the experience portrayed in “home free,” the effective combination of a good investment in a dwelling and proper planning in the context of traveling can convert the existence of a retiree into the life one dreams about.
