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Baby Boomers have become one of the major drivers of rental demand over the past decade, according to a study by Harvard University’s Joint Center for Housing Studies. Other research finds that Boomers accounted for twice the growth in renter households as millennials did since the recession — and their ranks will only grow as more Boomers reach retirement age.

But is renting in retirement a smart financial decision? Experts say Boomers are weighing a different set of factors from their millennial counterparts. Many Boomers already own a home and may be looking to downsize in favor of less maintenance — and perhaps a warmer climate. While homeownership is a way for Millennials to grow their wealth, Boomers should already have built their assets. Instead, they should focus on making sure their money stretches through their golden years.

We talked to two financial planners — Eleanor Blayney, consumer advocate at the Certified Financial Planner Board of Standards, and Jeff Bucher, president of Citizen Advisory Group in Ohio — and came up with three critical questions Boomers should ask themselves as they weigh whether to rent or buy.

How long will you live there?

The five-year rule of thumb still applies to Boomers: Buying a home only makes sense if you plan to stay there at least five years. Closing costs, realtor’s fees and moving expenses make homeownership an expensive upfront proposition, and it takes time to make that money back through appreciation.

That’s an obvious piece of cautionary advice for Millennials who have yet to put down roots. But Boomers often fail to grasp how quickly their lives can change as well. Dreams of retiring in a secluded mountain cottage can fade once a grandchild is born. Florida may seem like paradise — until summer arrives. Or plans to travel the world can be sidelined by health complications.

“Flexibility in housing is important as we get older,” Bucher said. “You want to be able to understand what the end game can be for us.”

What else could you be doing with your money?

The standard argument against renting is that the monthly payments are the equivalent of flushing money down the drain.

But that analogy applies mainly to young adults, who are searching for ways to start building wealth. Boomers have had decades to do that. Instead, they should be thinking about the best way to deploy what they’ve already accumulated.

Blayney said she tries to get her clients to see the bigger picture: Real estate should be just one part of a broader retirement portfolio. A house is a large but relatively illiquid asset, meaning that it’s hard to access the equity in your home to pay for a medical expense or a trip to Spain.

Boomers should focus on making their savings work as hard as possible for as long as possible. That might mean selling the family home, putting some of the proceeds into a brokerage account and renting an apartment. Diversifying the potential sources of income during retirement also creates greater flexibility in tax and estate planning, Blayney said.

“You have the ability to begin to engineer your income,” she said.  “You have a portfolio now with lots of possibilities.”

That doesn’t mean buying a home in retirement is never worth it — the reasons are just different. Bucher said the tax deductions associated with homeownership might make it worthwhile, especially for Boomers with higher incomes.

The question, he said, is “how do we get the most cash in our pocket to do all the things that we have dreamt of doing?”

What social services do you need?

Buying a home also means paying property taxes, which many jurisdictions use to pay for schools — an important and desirable public service but one that Boomers generally do not use. But Bucher cautioned that renters still pay that tax indirectly because it’s usually factored into the monthly rate for an apartment. Instead, retirees should be on the lookout for jurisdictions that levy special taxes to fund education.

Health care should be a critical component of Boomers’ financial plans. Medicaid could help ease the burden, and Blayney said some Boomers may choose to spend some of their savings in order to qualify for its long-term care benefits.

In those cases, she said, owning a home may be the best option. And in the end, the government cannot claim the house to recoup health care payments if a spouse is still living there.

Planning for the next stage in life can mean confronting uncomfortable but necessary topics. Blayney said that’s the key to ensuring the golden years don’t go bust.

“Baby Boomers are sort of redefining the next phase,” she said. “You want to do the math but you want to superimpose the likely lifestyle changes coming.”

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