By your late 50s, the American dream says you should own a home, have years of equity behind you and be thinking about paying off the mortgage.

Plenty of households are following a different script. The U.S. Census Bureau’s third-quarter 2025 Housing Vacancy Survey puts the homeownership rate for households headed by someone aged 55 to 64 at exactly 76%. That leaves 24% who are, presumably, renting.

For many approaching retirement, renting can solve money challenges that arise with homeownership, even with a paid-off house.

Owning a home is expensive

A house does not retire when you do. The roof still ages. The furnace still breaks. Property taxes arrive. Insurance premiums change. Maintenance costs can land at exactly the wrong point in a retirement plan.

In the Federal Reserve’s 2025 survey of household finances, more than 6 in 10 insured homeowners said their insurance premiums had risen by more than expected in recent years.

Renting moves much of the repair risk to a landlord. A tenant may face rising rent, but a failed air conditioner or roof replacement generally does not become an emergency withdrawal from a retirement account.

Renting is convenient

The Federal Reserve’s most recent detailed look at why people rent, based on its 2024 survey, found that 58% cited convenience. Another 39% said they preferred renting.

The Fed’s figures cover renters of all ages, but the appeal can become obvious as retirement approaches. Renting makes it easier to move closer to adult children, try a warmer climate or spend time in a new city without buying and selling property each time.

The Joint Center for Housing Studies of Harvard University’s Housing America’s Older Adults 2023 report says more than 1 in 5 older households rent.

For someone who has spent decades maintaining a house, fewer responsibilities can be a feature rather than a compromise. However, if you are unlucky enough to experience fire, theft or a burst pipe at two in the morning, your landlord’s insurance rebuilds the walls, but everything inside is on you.

Renters insurance fixes that. For about $22 a month, renters insurance covers $30,000 of your belongings, $100,000 in liability if a guest gets hurt, and your hotel bill if a disaster forces you out of your home for a time. Compare real-time quotes side-by-side on Insurify. No spam, fast, and rated 4.7 stars on Trustpilot.

Selling can free up money

A longtime homeowner can be wealthy on paper and still feel short of money. Selling can release equity tied up in spare bedrooms, a large yard and a property chosen for an earlier stage of life. A 60-year-old who rents a smaller home may have money to invest, set aside for health care costs, or add to retirement reserves.

That does not automatically make renting financially superior. Rent can rise, and tenants do not benefit from future home appreciation. But the calculation changes when the question is no longer, “How much could this home be worth in 30 years?” but, “What do I need my money to do during the next 30 years?”

Buying may be out of reach

Not every older renter has made a lifestyle choice. The Federal Reserve’s 2024 survey data shows that 68% of renters cited an inability to afford a down payment as a reason for renting. Another 49% said they could not afford the monthly mortgage payment, while 42% said they could not qualify for a mortgage.

Those barriers do not disappear at age 55. Divorce can divide home equity. A job loss can damage savings. Someone who sold a home earlier may also find that buying back into the market is difficult.

Starting a new mortgage near retirement creates another concern. A 30-year loan taken out at 60 can follow a borrower into their 90s unless they pay it down early or sell.

The Federal Reserve’s 2025 household survey found that recent movers with a mortgage reported a median monthly payment of $2,300. Recent movers who rented reported a median payment of $1,300.

That $1,000 difference does not prove renting is always cheaper. Owners build equity, while renters do not. But it helps explain why buying can lose some of its appeal as retirement gets closer.

Renting creates a different retirement risk

A renter has fewer repair bills, but less control over a major monthly expense. Rent may rise when a lease renews or a landlord may sell the property, requiring the tenant to move out.

The Federal Reserve reported that 23% of renters had fallen behind on rent at some point during 2025. This was far more common among lower-income renters, but it is a warning for anyone planning to rent on a fixed income.

Homeownership remains a powerful way to build wealth, and Census Bureau data shows the homeownership rate rises further among households led by someone 65 or older.

But a house is both an asset and a place to live. Those two jobs do not always point to the same decision. For some people approaching retirement, owning provides stability and equity. For others, renting removes maintenance burdens, releases cash and makes moving far easier.

By your late 50s, the best home may be the one that fits the life you are preparing to live. Just don’t forget renters insurance.