With home prices and rents reaching record highs in many areas of the country, financial experts are advising retiring workers with limited income to plan ahead.
The Federal Housing Finance Agency House Price Index estimates that U.S. home prices increased 4.5 percent last year and the National Association of Realtors forecasts median home prices will increase 3 percent in 2025 and 4 percent in 2026.
“Social Security was never designed to fully cover retirement living, yet millions of folks are trying to stretch it to do just that,” said Charlotte, North Carolina, financial planner and educator Nadia Vanderhall told NTD. “And with the way housing costs have jumped, especially in cities and even some suburbs, that check doesn’t go as far as it used to.”
Some 73 million Americans collect Social Security benefits, according to Social Security Administration (SSA) data, and the average retired worker receives $2,002.39 per month.
As a result, Vanderhall believes staying ahead of the housing market is key to maintaining financial peace.
“If you’re in retirement or getting close, make your housing decisions with your budget, not just your emotions,” she said. “Your retirement income isn’t going to stretch itself—you’ve got to direct it. That might mean leaving an area you love because the cost of staying is too steep.”
Cities in states such as Florida, Tennessee, and Texas are often high on the list of places to live in or relocate to among retiring workers because they lack a state income tax and have affordable housing in certain areas.
Another way to stay ahead of housing costs is to enter retirement without a mortgage, according to Las Vegas financial advisory firm Thrivin' Life founder Lucas Barcelo.
"If you’ve got 5-to-10 years, make extra payments toward the principal and knock it out early," Barcelo told NTD News.
Even without a home mortgage to pay off, Dallas, Texas, financial adviser Randall Yates advises allocating $1,000 to $1,500 a month for housing insurance, taxes, utilities, and maintenance.
“Property taxes and emergency repairs are the biggest cause for concern,” Yates told NTD. “A sudden tax hike or $10,000 roof repair devastates fixed incomes, especially when there's no pension or buffer in an emergency fund.”
If housing is taking up more than a third of income, it’s a red flag, according to Vanderhall, who advises lowering housing costs by first reviewing cash flow and then income-mapping.
“You might need to downsize, relocate to a more affordable area, or even look into house-hacking, which means renting out a room or basement in your home to offset your costs,” Vanderhall added. “This isn’t about pride. It’s about staying in control.”
The views and opinions expressed are those of the interviewees. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.