The cost of maintenance, insurance, utilities, property taxes and even a mortgage on your home may be more than your retirement budget allows. By selling your present home and relocating to a smaller, less-expensive home, you may reduce these costs and shrink the size of your mortgage, or even eliminate it. You may even be able to purchase a new home and have additional funds to retire other debt or invest for retirement income. You can frequently find towns or areas that have a lower cost of living to extend the buying power of your dollar.
For those who need to secure a part-time job during retirement, moving to a new area may inhibit your ability to find a job because of lack of contacts. You may find it difficult to sell your home at a reasonable price that is financially profitable enough to cover the purchase of a new home, closing costs or moving expenses.
Taxes are another consideration. Some states exempt certain types of retirement income from taxes and have lower overall property, sales and other taxes.