Many people spend their working years living in an expensive part of the country because doing so gives them access to great schools for their kids and jobs with higher salaries. But once you retire, ideally, you won't have to worry about any of those things. And so you may be inclined to move to a locale that's less expensive than where you live today.

Let's say you're in line for a $2,000 monthly Social Security benefit, and you plan to withdraw another $2,000 a month from your nest egg. Your $4,000 a month may not go very far in a more expensive area. But in a lower-cost part of the U.S., that could make for a very comfortable lifestyle.

Not only might relocating in retirement help lower your living costs, but it could also allow you to sell a more expensive home, replace it with a cheaper one, and pocket the difference. And going that route may end up being a more lucrative prospect than you'd imagine.

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What could selling your current home do for you?

A recent report by Vanguard found that relocating in retirement is a great way to cash out on home equity and enjoy more financial stability. Specifically, the report found that migrating to a cheaper housing market could help the typical older homeowner extract about $100,000 of home equity.

Now, clearly, that $100,000 figure won't hold true in every scenario. And Vanguard's estimate is based on 2019 data and home values. But if anything, home values are generally higher today than they were four years ago, so this strategy is one that could pay off for you in a very big way.

Let's say you own your home outright, and it's worth $400,000. If you were to sell it and move to an area where you can buy a comparable home for $300,000, it's easy to see how you might manage to walk away with a huge payday. And from there, you'd have the option to save and invest your home sale proceeds to have even more income at your disposal.

Is relocating the right choice for your retirement?

If you live in an expensive housing market or part of the county and you relocate to one that's less expensive, you might benefit financially to a notable degree. But there are consequences to relocating in retirement that aren't just financial.

Relocating could put you hours away from family, like your grown kids and grandchildren. It could also put you far away from your social network and support system.

Relocating might also mean losing access to certain amenities you enjoy today, like nearby shops, access to great healthcare providers, and public transportation. These are factors to seriously consider before making your choice.

Remember, if relocating in retirement doesn't work for you, you could always try downsizing while staying where you are. You may not walk away with as large a profit as you would by selling your home and buying a much cheaper one in a completely different market. But you can still benefit financially without having to abandon an area that has a lot to offer you.