A reader asks, “Leaving aside the emotional component, is it “better” for a retired couple to live in a rented flat rather than buy a flat with the sale proceeds of their home?”
This is a tough one as there are many factors to consider. Assuming they lived in an old independent house, the usual route is to get one or two flats in the same location, live in one and rent one.
Another choice is to buy a flat near children in another location or city. Yet another choice is to buy (or rent) a retirement home with the proceeds.
Living in rent after living in our own house is difficult unless there is a significant shortfall in the retirement corpus (forcing the couple to sell their property). There must be an extremely strong reason to do so. For example, staying close to children to help out with the grandkids, etc.
Even then, shifting houses, dealing with landlords, adjusting to a new locality, etc., can be painful in old age unless an excellent arrangement is in place.
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So, it is impossible to leave emotions out of the decision. Emotional and physical support in retirement is even more important than financial independence.
From the tone of the question, I think the decision has been made to sell the house. If that is the case, renting can be an option only if there is a strong reason: shortfall in the retirement corpus, helping out children, etc.
Buying a flat in the exact location or locality is a good idea if you value your independence, and retirement income is not an issue.
Buying a retirement villa with excellent amenities and support staff is an option if you think you need assistance, can benefit from the company of peers and can adjust to the new situation (which is tough).
So, as mentioned above, this is an extremely personal and, therefore, extremely emotional decision. I can only list possibilities as far as my thinking takes me.
When I am put in a spot like this, I can only ask, what would I do? Having lived in my own house all my life, renting would be difficult, especially in old age. I would prefer to buy a house in the same locality or a different location to be close to my child or buy a retirement villa if life allows me the time to prepare for supportive care.