Should You Take on a Roommate in Retirement?

You’ve got an extra room and could use the extra cash. Should you take on a roommate in retirement? With the median rental price of a two-bedroom unit in the U.S. costing $1,887 in February 2025, it might be tempting to consider.

If you do choose to open your home to a roommate, you won’t be alone in making that choice. People over 65 are the fastest-growing age group taking in roommates in their homes, according to SpareRoom, an online platform for people to find roommates.

Here are a few points to consider before taking the step of living with someone.

Advantages of Having a Roommate

Having a roommate (or multiple roommates) can be an easy way to reduce your cost of living—for many people, housing is one of their largest monthly expenses.

“Even a few hundred dollars a month can have a big impact and that might allow you to retire a bit earlier or spend more on things you enjoy,” advises Justin Pritchard, a certified financial planner at Approach Financial.

But you will need to pay taxes on that money.

“The biggest thing to remember is that you have to report the rent as income. You can take deductions to reduce some or all of the income from being taxed, but no matter what, it adds a layer of complication to your tax return,” says Tara Unverzagt, president and senior financial planner at South Bay Financial Partners. “If you file yourself, you may need a professional to do it correctly.”

In addition to the money, having a roommate may be a good way to increase social interaction because many seniors report struggling with loneliness.

A 2023 University of Michigan survey found that more than one-third of adults ages 50 to 80 reported feeling isolated over the past year. Additionally, one-third said they had infrequent contact, which was defined as once a week or less, with people from outside their home in 2023.

Having a roommate could help some seniors stave of feelings of isolation and loneliness due to living alone.

Disadvantages of Having a Roommate

You won’t have as much privacy when you invite a roommate to live with you.

“Is privacy very important to you? If so, you probably want to avoid going the roommate route,” advises Eric Maldonado, a certified financial planner and owner of Aquila Wealth Advisors.

There may be disagreements with a roommate, something you don’t have to worry about if you live alone.

“In any shared living space, there may be conflicts regarding cleanliness and the way the space is utilized. And one of the biggest downsides is that if it doesn’t work out and you want to get the tenant out of the home, it may be very uncomfortable during the process, which could drag on for quite some time,” says Sebastian Frey, a broker associate at Compass Real Estate.

Finding a Roommate

Start by reaching out to people that you know and let them know you are looking for a roommate.

“If you have family or friends local you could try letting them know you are looking for a roommate. If you are a member at a church or social club you could let people know you are looking for a roommate and may even ask to post an announcement,” Maldonado says.

You may wish to place an online ad detailing the room you have for rent.  

“You can post your room on Craigslist or other local accommodations search websites. If you are looking for someone of a certain age or stage of life, there are probably civic clubs or forums you can post in online that cater to those age groups,” Maldonado advises.

Vetting a Roommate

You’ll want to check out the background of a potential roommate to make sure they are a good match for you.

“You would want to have a very good vetting process. Patience and taking your time [are] key here. Do a background check, follow up with references, and have a couple conversations first,” Maldonado says.

Discuss with a potential roommate your schedule and what you expect from someone living in your home.

“Make sure you clearly outline your living arrangements, your schedule, and your expectations before committing to renting out a room. Take the time to choose a roommate who you think you’ll get along well with,” Hutchinson says.

Preparing for a Roommate

You’ll need to get the room you are renting out ready for a roommate and write up a rental agreement.

“There’s some administrative setup you’ll need to do, including creating a written agreement, preparing your room, and making sure you’ve read up on the state and local laws and tax rules. But the financial reward is well worth your time,” Hutchinson says.

Not sure how much to charge? SpareRoom provides a list of average rents in metro areas around the United States.

“Take a look at other room listings in your area or average rents to see how much you could charge for your room,” Hutchinson advises.

The Bottom Line

If you like company and have a spare room in your home, you may be able to supplement your retirement income by renting a room. Do a background check on all potential renters and ask for references.

Search for renters online, inquire with friends and family, and ask around at social clubs. You’re looking for someone who will be a good fit for your home. Don’t rush the process. Make sure to clean and prep the room and prepare a rental agreement. Once you find the right person, the room is theirs and the monthly rent check is yours.