The traditional choices for retirees have been to move to a distant retirement community, or to stay within the traditional family home. However, a third option has emerged: downsizing into a more comfortable home locally.

In September 2009, Forbes published an article that described the results of a new study by the Center for Retirement Research at Boston College. The study focused on the happiness of retirees, and showed that seniors who made short-distance moves were somewhat happier and wealthier than those who stayed put.

Reasons to Move

Some of those surveyed moved as part of a retirement plan, while others moved in response to a shocking life change--such as a divorce or being widowed. Both of these groups were happier than seniors who had stayed in their home, particularly those who had planned a move. Of seniors who chose to move:

• 28% moved to be closer to family (either to be near their children or to care for an older relative)
• 22% moved because of financial stress
• 21% moved to upgrade to a better house and/or location
• 16% moved for traditional retirement reasons such as leisure activities or a warmer climate

Generally, the survey concluded, retirees are happiest when they choose to move to a more manageable residence within a familiar community near family and friends.

A Reverse Mortgage Can Be Used for a New Home

Some seniors considering a reverse mortgage, to ease their cash flow during retirement, may think this financial tool precludes moving. However, rules surrounding reverse mortgages changed at the beginning of 2009, and now allow seniors over age 62 to take out a reverse mortgage when they buy a new home.

Seniors should compare quotes from reverse mortgage lenders to see if this is an option when they sell their current home and buy another.

Interestingly, the survey looked at whether seniors wanted to continue owning a home. Among those who planned their move as part of retirement, only 18% opted to rent instead of buy their new residence.