Retirement And The Sharing Economy

Patrick Foley, CFP

Author, Winning at Retirement

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In our book Winning at Retirement, my co-author Kristin Hillsley and I devote a chapter to where to live in retirement. As befitting the overall sense of freedom that should come with retirement, there is often a great deal of latitude available when it comes to location. And as with other elements of seeking retirement bliss in the modern age, technology can play a helpful role.

The so-called “sharing economy” presents us with tools that may add flexibility when it comes to choosing living arrangements. This relatively new technological phenomenon has thus far presented in two main ways: ride sharing and real estate sharing.

Uber pioneered the modern version of ride sharing. Initially as a way to quickly order up a limo, and later as a less expensive app-based alternative to cabs. Uber was followed into the market by Lyft, and now we don’t think twice about ordering up a ride with a few clicks on our phone.

For some of us, particularly deeper into retirement, age can present challenges when it comes to driving. Currently some of that difficulty, or the need to rely on family members to act as chauffeurs, can be alleviated by services like Uber and Lyft.

Moreover, the next major paradigm shift in this field will be automated driving. In the probably not-too-distant future (the exact timing is hotly debated), cars will drive themselves. This means a further reduction in the cost and difficulty of getting around, as either our own cars or vehicles we order on our phones will take us where we need to go in a safe and relatively effortless manner without driver input. Already in some cities you can order up a cab with no driver right now, although there is still a ways to go before the technology is safe on a broader level.

This freedom of movement may help us expand our horizons when it comes to location in retirement. While proximity to family may be of paramount importance when it comes to choosing a place to live, ride sharing and eventually automated driving may help extend what we think of as a reasonable distance. An hour or more away might not seem so far when a robot is doing the driving.

In the realm of real estate there has been similar game-changing innovation in the form of home rental services. You list your home with a provider – leading players include Airbnb and Vrbo – and you are matched up with potential renters via an online listing. House keys are typically exchanged using a lockbox, coded door lock, or via a key exchange company, so there is no need to interact personally with a renter. The sites also facilitate payment and maintain a rating system for homeowners and renters, to help cut down on bad actors on either side of rental transactions.

I do not have personal experience renting out a home. However, two of my sisters live in a Denver ski town and routinely rent out their homes. In their case, the Christmas season in particular can bring in significant revenue. In fact, in the right location rental revenue for even part of a year can largely or completely offset mortgage costs. One of my sisters has taken the practice a step further, purchasing multiple homes in desirable locations and renting them out for much of the year… except when she and her family want to use a particular house.

An entire ecosystem of service providers has sprung up around the practice of home rentals, so you can line up cleaners and maintenance people for a rented home quite easily in most locations. The practice is not without risks, after all you are allowing strangers into your home. That said, for the most part the transactions go smoothly, and the rating systems help weed out bad renters.

I have used these services on the other side, as a renter of homes for vacation purposes. Our experience doing this with family and friends has been great on a number of occasions, and we have used the approach for vacations in Florida and near a ski resort. For far less than the cost of a hotel you can rent nice homes throughout the country (or the world for that matter).

There are plenty of resources available online to help you learn about the process of renting out your home, including a book called Get Paid for Your Pad: How to Maximize Profit From Your Airbnb Listing. Search the internet for “how to rent out your home” and you will find many articles on the subject.

If you are someone who likes to travel, or dreams of having two homes but lack the budget for it, home sharing could provide a new revenue stream to bolster your retirement cash flow. Choose houses in desirable locations, and you can move back and forth between them while renting out the one you aren’t using. Even in the case of a single home, you could list it for rent anytime you go on vacation… potentially paying for the vacation in the process.

The sharing economy is providing us with mobility and revenue tools that did not exist a decade ago. Whether it means not owning a car, or generating additional revenue, think creatively about how these new tech tools might help you achieve a greater degree of retirement freedom.

Benjamin Hotel
Benjamin Hotel


Patrick Foley, CFP

Patrick Foley, a Certified Financial Planner™ certificant with Baird, has been advising clients toward happy retirements for nearly 30 years.

With his partner Kristin Hillsley, Pat co-authored Winning at Retirement, and Winning at Retirement: First Responder Edition.

He lives in Philadelphia with his wife, two daughters, and their two crazy dogs.