Jun 2, 2025
Americans believe they need roughly $1.26 million to retire comfortably, according to Northwestern Mutual.
But many seniors are rapidly approaching retirement with far less than that figure.
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In fact, 20% of U.S. adults over the age of 50 have no retirement savings at all and 61% are worried about running out of cash after they stop working, according to the AARP.
This cash squeeze has pushed some older adults to adopt creative solutions to bolster their retirement income — including geographic arbitrage, or geoarbitrage.
Geoarbitrage means moving to regions with a lower cost of living while continuing to earn income from higher-cost areas, allowing you to save more or enhance your quality of life.
Here’s how you could apply this technique to add $100,000 or more to your nest egg.
Moving could bolster your retirement
Geoarbitrage is arguably more effective if you’re a homeowner. Selling off your primary residence and moving to a cheaper home in another part of the country could unlock tremendous cash for your retirement.
Fortunately, 61% of Baby Boomers (those currently aged 60 to 78) own their own home, according to Clever Real Estate.
Of those, 54% own their primary residence free and clear, which means they don’t have to worry about a mortgage, according to Redfin.
Tapping into this home equity — by selling and moving out of the city or to a new state — could unlock a huge chunk of cash for retirees.
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Given that the median home sells for $416,000, selling it and moving to a new home that is 25% less expensive could unlock nearly $100,000 in cash for the typical homeowner.
Geoarbitrage can also work for the 39% of Baby Boomers who don’t own homes. Excluding rent, the cost of living is more than 20% lower in Miami Beach than New York City, according to Numbeo.
That means you could move to Florida and potentially save tens of thousands every year over the course of your retired life.
Many are also considering moving to another country to secure a better retirement. According to a recent Harris Poll, nearly 26% of Baby Boomers are contemplating leaving the U.S. in the next two years, and 6% of them are serious about it. A better quality of life and easier retirement are their top priorities.
However, before you add geoarbitrage to your retirement plan, consider some of the drawbacks and caveats.
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Caveats
Simply moving to another location may not be a silver bullet for your retirement woes. For instance, in some locations you might be considering geoarbitrage at the same time as most of your neighbors.
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According to Zillow, there is an oversupply of 12.8 million empty-nester homes that are too big and not appealing to younger buyers.
Many of these are concentrated in cities like Pittsburgh, Buffalo, Cleveland, Detroit and New Orleans. If you live in any of these locations, unlocking your home equity might be more difficult.
In other words, the window of opportunity for your downsizing plans is rapidly shutting in certain locations.
The costs of selling and moving should also be considered if geoarbitrage is an element of your retirement plan. Brokerage fees, transport costs and renovations to your new home could all quickly eat into your nest egg.
You may also want to consider all the downsides and pitfalls of geoarbitrage that go beyond finances.
For instance, would you truly enjoy living in a state that is cheaper but much further away from your friends and family? Do you want to learn a new language in your senior years? Would you need to make compromises on medical care and assisted living if you decided to move?
Your time, savings and income are all limited in retirement, which means once you move you might not have much flexibility to reverse this decision. So if you plan to apply this strategy, proceed with caution.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
