I’m a retiree with $360,000 in my IRA. Why won’t rental agents call me back?

Unfortunately, not all money is money when it comes to renting an apartment in New York City as a retiree, but there are some workarounds you can take advantage of, according to our experts.

For starters, you’re up against the 40-times rule: NYC landlords prefer renters who earn an annual salary of 40 times the monthly rent, in addition to good credit. So, for that $3,000 a month apartment, you would need an income equal to $120,000.

[Editor's note: A previous version of the article ran in January 2024. We are presenting it again in case you missed it.]

Of course, as a retiree you’re no longer drawing a salary. Having money in the bank would seem to mitigate that hurdle, but unfortunately, most landlords don’t qualify renters based on cash assets, including IRAs.

Why isn’t money in the bank good enough for landlords? The thinking is it could be wiped out in an emergency or through careless spending. Owners used to take rental payments up front to offset these concerns, but the 2019 rent reforms eliminated the practice of pre-paid rent.

Agents are well aware of what you need to earn in order to satisfy a NYC landlord’s requirements, and that may be why you aren’t getting any calls back.

How a lease guarantor works

One workaround that is available to you is to get a lease guarantor—this could be a parent or other close relative who agrees to pay your rent in case you default. (Be sure to read up on the strict income requirements for using a personal guarantor.) Or you could turn to institutional guarantor, which serves in that capacity for a fee. The fee could range from 75 to 90 percent of one month's rent, depending on your credit score.

Tell agents you have a guarantor

Having a guarantor would help you get your foot in the door with agents, said Kevin M. Kurland, president and broker at Home By Choice, a NYC real estate brokerage. You should definitely mention it upfront when reaching out to agents and brokers, he said.

Take out a lump sum or… 

When it comes to estimating how much rent you can pay, Kurland said to take your social security income, IRA balance, lifestyle, and expenses into consideration. You may want to take money out of your IRA to help meet your goals, he said.

“As a general rule, financial advisors often suggest limiting housing expenses to around 25-30 percent of your gross income, but since she’s retired, to calculate a rough estimate, she might consider withdrawing a portion of her IRA as a lump sum to cover annual rent expenses for a certain period for example, a year or two,” he said.

…make regular withdrawals from your IRA

Another approach is to use the 4 percent rule.

“This rule suggests withdrawing 4 percent annually from your retirement savings without significantly depleting it. For instance, if your IRA is $360,000, 4 percent would be $14,400 per year. She can supplement this amount using her social security funds,” Kurland explained. Talking to a financial advisor is a good idea to get a more tailored assessment, he added.

Go with a mom-and-pop landlord

Another tried-and-true approach is to seek out small, “mom-and-pop” landlords. Private landlords, as opposed to large, corporate owners, are often more willing to look at your entire financial picture and not get as hung up on meeting specific income thresholds.

You’re likely to have more luck finding small landlords in Brooklyn and Queens rather than Manhattan.

Be sure to also look for rentals in co-op and condo buildings as well as townhouses, where owners can be more flexible about choosing their tenants.

Trouble at home? Get your NYC apartment-dweller questions answered by an expert. Send your questions to [email protected].

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