Realtor.com
It’s no secret that rising housing costs, including property taxes, insurance, and utility bills, have been draining Americans’ wallets for quite some time. However, for a specific cohort, this can also translate into making significant lifestyle changes and enormous decisions.
Many seniors are choosing to “unretire” to be able to stay in their homes, and many pre-retirees are also considering working longer. In fact, “70% of workers who have not yet retired have considered pushing back their retirement date, a trend that has increased over the past few years,” according to an F&G survey.
Chris Orestis, president at retirement resources platform Retirement Genius, says that rising housing costs combined with overall inflation are squeezing retirees who live on fixed incomes and at all income levels.
“Many seniors are still carrying mortgages or debt into retirement, and Social Security alone doesn’t come close to covering the gap. For some, the only way to keep their homes is by returning to work to generate income, even when they thought they’d be done working by now,” Orestis adds.
Why is this happening?
Rising housing prices are wide ranging and affect homeowners in multiple ways.
For instance, homeowners insurance rates have been rising in much of the country.
Jason Sorens, senior research economist at the American Institute for Economic Research, says that nationally, average homeowners insurance premiums rose 24% from January 2023 to January 2025, with the most significant increases last year coming primarily in the Midwest and Rockies, in states including Nebraska, Montana, and Minnesota.
He adds that the loss of coverage for many homeowners was a big story in California this year, while Florida has also seen premiums rise on the coast because of hurricanes.
“Even if you own your home, rising homeowners premiums, property taxes, and energy costs can lead to financial distress for seniors,” he adds.
According to him, one of the biggest drivers of seniors needing to return to work is simply not having saved enough, adding that a little over half of retirees are living on $30,000 a year or less, according to the Richmond Fed.
In addition, home values have exceeded the normal inflation rate for several years.
As Melanie Musson, insurance and finance expert at Clearsurance.com, notes, when a house is worth more, it has higher property taxes and will cost more to insure, so even if you’ve paid off your mortgage, you might end up paying close to what you had paid for a mortgage when you first bought your house. And if you live with an HOA, you’re likely also going to face increasing HOA dues, she says.
Why do seniors want to stay in their homes?
There are a slew of reasons for seniors to want to stay in their homes as they age. In fact, the “aging in place” trend has been gaining momentum in the past few years. A recent AARP survey found that a whopping 75% of adults 50 and older said they wish to remain in their current homes as they age, while 73% hope to stay in their communities.
Bobbi Rebell, CFP, a personal finance expert at CardRates.com, argues that we are emotionally attached to our homes and often have very special memories. We also tend to want to avoid change if we can.
In addition, she says it is not always financially viable to move somewhere else, given today’s economics.
“If someone has a mortgage locked in, a new one could carry double the interest rate, making a move financially unwise. Housing is expensive, as is the cost of a move, and downsizing is not always a financial win,” Rebell points out. “There are transaction fees, taxes, and realtor commissions to be paid along with movers and very often, hiring someone to help sort through a lifetime of stuff that has been collected.”
Finally, retirees are also often very comfortable and dependent on their community for social support and for friendships.
“Moving to a new place can be very disruptive and not always beneficial. At the end of the day, many retirees simply want to age in place and stay in the home they already have rather than risk moving to the unknown,” she adds.
Are there financial drawbacks to unretiring?
While many Americans think unretiring can be a wise financial decision and help them stay in their homes instead of downsizing or moving to a cheaper locale, experts note that there are also some financial drawbacks, and retirees should weigh their options carefully.
Yehuda Tropper, CEO of Beca Life Settlements, an educational platform, notes that while rejoining the workforce can help plug a financial gap, it isn’t always the best financial choice.
“Additional income pushes retirees into higher tax brackets and raises Medicare premiums as well, reducing portions of benefits that are nontaxable. In some cases, only working part time erodes more than one gains due to these adjustments,” he says.
How can retirees avoid having to return to work, and how can pre-retirees prepare?
Pre-retirees should budget and plan
Consumer finance expert Austin Kilgore, an analyst with the Achieve Center for Consumer Insights, part of digital personal finance company Achieve, recommends that younger adults nearing retirement start by checking one of many available online retirement calculators to determine how much savings they’ll realistically need to pay for their expenses in retirement.
“You can also visit the Social Security website for an estimate of what your income there would be. Given the uncertainty regarding government programs, it’s wise not to depend on Social Security entirely, but it’s still good to get an idea,” he adds.
He says the next step is to create and use a budget built on goals and include retirement savings as an expense in the budget so that it is a “bill” to be paid every week or month.
“Then put that savings on autopilot by adding a designated percent or amount of every paycheck to a retirement savings account,” Kilgore advises.
Be proactive and find alternative solutions.
Retirement Genius’ Orestis says that alternative funding solutions, such as a reverse mortgage or liquidating unneeded life insurance policies through a life settlement, can generate significant liquidity.
He urges younger adults to invest consistently, manage debt wisely, and understand that today’s retirement is likely to be longer and more expensive than previous generations’.
Cutting back
Finally, CardRates.com’s Rebell notes that cutting back can include refinancing to lower the monthly mortgage cost and ensuring this cohort gets all the property tax breaks they are entitled to as senior citizens.
In addition, cutting expenses, especially those they may not even realize they have, is a good idea.
“That can include subscriptions that are on autopay, insurance policies that are no longer needed, and looking at how you use things you pay for, including utility and cable bills,” Rebell says. “You may be running the air conditioning on a second floor you rarely use. Consider lowering it a few degrees to take the edge off that bill.”