By your late 50s, the American dream says you should own a home, you should have years of equity and you may be thinking about paying off the mortgage.
A lot of houses are following a different script. US Census Bureau third quarter 2025 housing vacancy survey The home ownership rate for households headed by someone aged 55 to 64 remains at exactly 76%. This leaves 24%, who are probably living on rent.
For many people approaching retirement, renting can solve the money challenges that arise with home ownership, even with a home paid off.
owning a home is expensive
You doing this doesn’t make a house retire. The roof is still old. The furnace still breaks. Property tax comes. Insurance premiums change. Maintenance costs can hit exactly the wrong point in a retirement plan.
Federal Reserve in 2025 survey In terms of household finances, more than 6 in 10 insured people said their insurance premiums have increased more than expected in recent years.
When renting, most of the risk of repairs falls on the landlord. A tenant may face rising rents, but a failing air conditioner or roof replacement typically does not constitute an emergency withdrawal from a retirement account.
It is convenient to rent
The latest detailed look from the Federal Reserve Why do people rent?based on its 2024 survey found that 58% cited convenience. Another 39% said they prefer to live on rent.
The Fed’s data covers renters of all ages, but the appeal may become clearer as they approach retirement. Rental living makes it easier to move closer to adult children, experience a warmer climate or spend time in a new city without having to buy or sell a property each time.
Harvard University’s Joint Center for Housing Studies Housing for America’s Older Adults 2023 report It is said that more than 1 in 5 older homes rent.
For someone who has spent decades maintaining a home, fewer responsibilities may be a feature rather than a compromise. However, if you’re unlucky enough to experience a fire, theft, or burst pipe at two in the morning, your homeowner’s insurance covers rebuilding the walls, but everything inside is on you.
renters insurance Fixes it. For about $22 per month, renters insurance covers $30,000 of your belongings, $100,000 of liability if a guest gets injured, and your hotel bill if a disaster forces you out of your home for a period of time. Compare real-time quotes side by side on Insurify. No spam, fast, and 4.7 star rating on Trustpilot.
Selling can free up money
A longtime homeowner may be rich on paper and still be short on money. Selling can release additional bedrooms, a larger yard, and the equity tied up in the property chosen for an early stage of life. A 60-year-old who rents a smaller home may have money to invest, put aside for health care costs, or add to retirement reserves.
This does not automatically make renting economically better. Rent may increase, and tenants will not benefit from future home appreciation. But the calculation changes when the question is no longer, “How much might this house be worth in 30 years?” But, “What do I need with my money over the next 30 years?”
Shopping may be out of reach
Not every former renter has chosen that lifestyle. The Federal Reserve’s 2024 survey data shows that 68% of renters cited inability to afford a down payment as a reason for not renting. Another 49% said they can’t afford a monthly mortgage payment, while 42% said they can’t qualify for a mortgage.
Those obstacles don’t end at age 55. Divorce can divide home equity. Loss of job can cause loss to savings. Even someone who has sold a home before may find it difficult to get back into the market to buy.
Starting a new mortgage near retirement creates another concern. A 30-year loan taken out at age 60 could take the borrower until age 90 unless they pay it off early or sell.
The Federal Reserve’s 2025 Household Survey found that movers with recent mortgages reported average monthly payments of $2,300. Movers who recently rented reported an average payment of $1,300.
That $1,000 difference doesn’t prove that fares are always cheaper. Owners build equity, while renters do not. But this helps explain why shopping loses some of its allure as retirement approaches.
Renting poses a different retirement risk
A renter has lower repair bills, but less control over major monthly expenses. When the lease renews or the landlord may sell the property, the tenant may need to move out, increasing the rent.
The Federal Reserve reported that 23% of renters were behind on rent at some point through 2025. This was far more common among low-income renters, but it’s a warning to anyone planning to rent on a fixed income.
Home ownership remains a powerful way to build wealth, and Census Bureau data shows that homeownership rates increase further in households headed by someone age 65 or older.
But a house is both a property and a living place. Those two jobs don’t always point to the same decision. For some people approaching retirement, ownership provides stability and equality. For others, renting reduces the burden of maintenance, frees up cash and makes it easier to move.
By your late 50s, the best home may be one that best suits the life you’re preparing to live. Just don’t forget renters insurance.