Many people who haven't saved enough to retire comfortably are contemplating working longer. But if delaying retirement isn't an option, there is another way homeowners can give their nest egg a quick and significant boost.
Selling your current home and moving to a place where housing costs considerably less can add to your retirement savings. If you currently live in a high-cost area and have built up equity in your home, selling and moving into a more affordable house can rescue your retirement finances or even raise your standard of living.
"If you are willing to make a move to a less-expensive area, the savings can be enormous," says Fred Brock, author of Retire on Less Than You Think: The New York Times Guide to Planning Your Financial Future. "There aren't many times in our lives when you can actually determine where you live on your own, and retirement is one of them."
Consider that the median home-sale price in 2010 was $635,000 in San Francisco, $457,000 in New York, and $368,000 in Washington, D.C., according to Onboard Informatics data. You could purchase a home for a fraction of these prices in Pittsburgh, Penn. ($97,900), Memphis, Tenn. ($71,000), or Port Charlotte, Fla. ($59,950).
A former business editor at the New York Times , Brock left behind the pricy city for a second career as a professor at Kansas State University in much more affordable Manhattan, Kan. "My salary in Kansas was not as big as at the New York Times , but I had more money," he says. Upon retirement, Brock further cut costs by moving to Green Valley, Ariz.
But you don't need to move halfway across the country to realize savings. "When you are in the workforce, people are willing to pay a lot of money to get closer to their job to reduce their commute. When you retire, you can move out of the area out to where you can afford it," says Bert Sperling, founder of BestPlaces.net. "Instead of living within 30 minutes of town, by moving two hours from town you can still enjoy all the amenities of a major metro area, but the house could be as little as a third or a fourth of the cost of what it was closer in. You might have a nest egg that you never even thought you had."
Upon Albert DeCoursey's retirement from the military in 1999, he and his wife Barbara left the Chicago area behind and tried out several retirement spots in Virginia and Vermont. They eventually settled into a condo in downtown Milwaukee, a city they say has the ideal mix of low costs and plenty of amenities. "We liked Chicago, but it was a little too big and expensive for us," says Albert, 65. "Milwaukee has the lakefront and it has the cultural and medical facilities without being a big city." While the two cities are 90 miles apart, the price differential is significant. The median Chicago home sold for $235,000 in 2010, while homes sold for a median of just $97,700 in Milwaukee last year.