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Some of retirement's toughest financial challenges can be solved in a single move.

Just relocate to smaller community. Seniors are doing this all the time and it's generally cast as a lifestyle decision. But there are clear financial advantages as well.

Savings last longer when you cut your cost of living, and housing problems can be addressed as well. City-dwellers often find the condo or bungalow they expect to buy in retirement uses up most of the money they make from selling the family home. Moving to a smaller community means cheaper housing, and lots of money left over.

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Let's look at a quick case study: Owen Sound, Ont., which topped a list of the 10 nicest Canadian cities to which to retire in an article that appeared on the MSN Money website last year. I happened to visit the city recently to do a talk at a local library and I asked around about the benefits of relocating there.

To set the scene, Owen Sound is a Southwestern Ontario city located about two and a half hours from Toronto by car. About 22,000 people live there, the average house price is about $190,000 and the average property tax bill is in the area of $3,100, according to Steve Furness, manager of economic development and tourism for the city. "It's a very walkable and driveable community in a beautiful setting," Mr. Furness said.

Owen Sound is right on Georgian Bay and the Bruce Trail, an 885-kilometre path along the scenic Niagara Escarpment that passes through town. Owen Sound has the nature thing nailed, if that's what you like. Ambience-wise, it resembles a lot of small Southern Ontario communities, with a historic downtown and neighbourhoods full of heritage homes built of brick. There were no Starbucks outlets that I could see, but a place called The Frog Ponds Café poured me a coffee I would rate as A+.

The average detached home in Toronto sold for a bit over $856,000 last month, which compares to $350,000 to $400,000 for a prime Owen Sound-area home. "People like the fact that they can come up from Toronto and afford waterfront property," said Steve Hiscox, a real estate agent at a local ReMax office.

Prefer a condominium? There's a downtown condo project in the preconstruction phase called The Sydenham, where two-bedroom units start at $284,900. You get a definite sense in the sales hype for this project of trying to appeal to city people. "The Sydenham will offer residence owners outstanding luxury amenities never before offered in Owen Sound," the developer's website says.

But what about the lifestyle change in moving from a big city to a small community in retirement – could you be happy?

"It can be very satisfying to move to a small community from a large one," said Mariella Vigneux, an Owen Sound resident and a professional coach specializing in retirement lifestyle planning through her company, Crabapple Coaching. "You're there to put down roots. It's not another stepping stone on the career ladder. You're retiring and you're willing to invest yourself in a new community."

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One caveat is to make sure that wherever you relocate, you can easily visit your kids and grandchildren. Ms. Vigneux says she's often struck when talking to people who just had a grandchild by how much joy they get out of it.

Her sensible suggestion for people who are curious about relocating: Try renting a home or cottage in the area for a few weeks or, better, a few months. Check out the weather in summer and winter (Owen Sound isn't especially cold, but they get heaps of snow). See what there is to do, and how friendly the residents are. Find out if there are other retirees from a big city who have already relocated there.

For economic reasons, many small towns and cities want you to relocate. They're losing young adults to the better employment prospects of big cities, and they need to maintain their tax bases. If you do choose to relocate, Ms. Vigneax suggests getting on it as quickly as possible after you retire. "The sooner you get relocated, the better. You've got to get the good living in while you can."

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The checklist

Mariella Vigneux, an expert on retirement lifestyle planning, says you're suited to relocating to a small community if you are:

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  • Good at building new friendships
  • Extroverted
  • A good learner (for example, will you be able to figure out how septic systems and wells work?)
  • Pursuing hobbies or interests that will help you meet people

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