Is rental income taxable in retirement?

If you are collecting enough rent to exceed the maximum tax-free income guidelines as dictated by the Social Security Administration, you will be taxed on your earnings. If you are at or older than full retirement age, you can work and still receive full benefits.

Will my rental income affect my Social Security?

No. Social Security only counts income from employment towards the retirement earnings test. Other kinds of income — including income from rental properties, lawsuit payments, inheritances, pensions, investment dividends, IRA distributions and interest — will not cause benefits to be reduced.

Should you invest the difference between renting an apartment and owning a home?

If you live in a market where you can rent an apartment for substantially less per month than you could own a home, you can invest the difference. The difference doesn’t have to be huge. For example, let’s say you rent for $1,000 but would have to pay a $1,300 mortgage payment on a comparable home.

Is there any benefit to being a renter?

But, make no mistake, it’s a big benefit to being a renter. Finally, you can make renting work to your advantage financially, too. If you live in a market where you can rent an apartment for substantially less per month than you could own a home, you can invest the difference.

What is it like being a first time apartment renter?

Whether you are moving out of your parents’ house or making the jump and leaving your dorm room days behind, becoming a first time apartment renter is a rite of passage and exciting time in your life. Of course, figuring out how to rent an apartment comes with new tasks and responsibilities, as well as freedom to pick and choose the perfect place.

What are the non-financial benefits of renting?

But renting has two big non-financial benefits that you shouldn’t overlook. Most importantly, renting gives you flexibility. Most rental leases are only a year long. If you aren’t ready to commit to living in one place for five years or longer, renting lets you stay as long (or as briefly) as you want.