“There is no one correct answer,” says Doug Heddings, founder of Heddings Property Group. “Each individual retiree must evaluate their financial portfolio to determine the cash that they will need to live on a monthly basis,” he says. Most retirees grew up with the idea that owning a home is always the best choice. The U.S. Census reports that 81 percent of Americans age 65 and older are homeowners. But that attitude may be changing. Experts agree it’s unwise for retirees to carry over large debts into their retirement years. In 2009, half of retirees carried mortgage debt, a figure that doubled from 2007 when only one in four had mortgage debt. And a recent study by the Joint Center for Housing Studies of Harvard University projects more than 2 million Baby Boomers now entering retirement will opt to rent.

So how do you decide?

1. Consider your lifestyle.

• Rent: Renting allows you to get acquainted with an area if you’re relocating or getting accustomed to smaller space. A rental property may be easier than a home if you travel a lot, need access to public transportation or require ready funds for health issues.
• Own: The family home often has strong sentimental value; however, when you’re empty nesters, your home simply may be too large. And if you’re still carrying sizeable mortgage debt, consider whether or not you can afford the payments on retirement income.

2. Evaluate the costs.

• Rent: Your outlay is rent and renter’s insurance (optional). You won’t pay for maintenance, repairs, and, in some cases, utilities. The downsides? Your money goes to another property owner instead of yourself. And your rent payment can continue to go up.
• Own: You pay for a mortgage, taxes, insurance, utilities and maintenance costs. Mortgage payments are predictable. However, it’s not like you’ll live “rent free” in your home once the mortgage is paid off: All other expenses will be ongoing.

3. Potential options.

• Rent: Renting typically costs less than the monthly outlay of homeownership. If you rent try to solve the difference between your rent and the amount you would spend on a mortgage payment. However, do the calculations: Rent can eat away at retirement savings — money you won’t get back.
• Own: You’re building equity in your home, making it a solid investment vehicle. However, the cash is tied up and not easily accessible to use in an emergency or if an opportunity arises. If your home is your primary investment, it may be a better deal to keep it — particularly if home values in your area are down — but recognize your funds may earn more if invested elsewhere.

It’s easy to see why Doug Heddings says there is no one correct answer. Each of us needs to consider our lifestyle, evaluate the costs and potential options. And as you make the decision to rent or buy, talk to your financial advisor, tax specialist or accountant. And explore your options with a Seniors Real Estate Specialist who works specifically with retirees on housing issues and purchases.