The Home You Want With the Money You Have

"I've always wanted to live in Colorado," says Kathy. "I was stunned by the Rocky Mountains. Their beauty took my breath away."

When retirement came, the couple briefly considered Utah, where Kathy's sister lives, and Southern California, where their grown sons settled, but both areas were too expensive. After a lot of online browsing, the couple focused on finding a central spot in a temperate climate that put family within driving distance. Montrose is a five-hour drive from Salt Lake City and a day's drive from Southern California.

Rob, an enthusiastic angler, has discovered the area's great fishing spots, and Kathy, who admits she's "a country person at heart," loves walking the nearby greenbelt with Hallie, the family's rescue dog. "Everyone we meet is thrilled to be in Montrose," says Rob.

Marilyn and John Lewis

The Dream: More space and quiet in the country

The Move: Savannah, Ga., to Statesboro, Ga.

The Cost: $204,800 for a 2,100-square-foot custom-built house

Many couples see retirement as a time to downsize. For Marilyn and John Lewis, not having to commute to work every day meant they could finally get the spacious house in the country they'd long wanted.

Last October the couple traded up from a 1,700-square-foot ranch-style house near a noisy railroad freight station in Savannah, where they'd lived for most of their 15-year marriage, to a customized house 50 miles northwest in the peaceful town of Statesboro, home to Georgia Southern University.

"It sure beats the hustle and bustle of Savannah," says Marilyn, 62, who worked as a nurse's aide. "We're surrounded here by beautiful, wide-open farmland." In addition, says John, 70, a Vietnam War veteran who worked as a tool and die maker at Gulfstream Aerospace in Savannah, "you get a lot more house for your money here. We paid $204,800 for this house, and down in Savannah it would cost $300,000 to $400,000."

Importantly, the three-bedroom house has a "bonus room" over the three-car garage, which provides ample space to one day accommodate Marilyn's parents, who still live in Savannah. "Our other house was too small to have them live with us," she says.

And while Marilyn and John love the quiet ("We've had the best sleep here that we've had in years," he says), they're quick to point out the convenience of their location. It offers nearby shopping, scenic hiking trails and extended family — Marilyn's parents are just 45 minutes away; her brother, a mere 20 — plus ocean beaches within a 90-minute drive.

Last August the couple took in the annual peanut festival in the small town of Brooklet, about eight miles away, and they can't wait until autumn, when they'll be among the thousands of football fans to cheer on the Georgia Southern Eagles.

Diane and Suzanne DeWitt-Hall

The Dream: A fixer-upper in a quaint river town

The Move: Rochester, N.Y., to Haverhill, Mass.

The Cost: $175,000 for a 1,200-square-foot, two-bedroom cottage

Diane DeWitt-Hall, 52, has weathered several major house renovations, so it takes a lot to daunt her. But when she first set eyes on the crumbling eyesore she now calls home, she nixed it immediately, telling her wife, Suzanne, 51, "This place can't be salvaged."

Diane and Suzanne, who got married this past October after four years together, knew what they wanted: a house in one of the Massachusetts river towns near their "ideal" of Newburyport; a price that, counting renovations, did not exceed $200,000; and a location that put them within easy driving distance of the Maine coast, which both adore.

But nothing was quite right. "We saw some beautiful places," recalls Suzanne, "but they were tiny condos or on really busy streets or in neighborhoods that were obviously in decline." Meanwhile, the owner of the cottage had taken it off the market with the intention of leveling it.

Motivated by the fact that this was a house they could comfortably afford, Suzanne dragged Diane to see it again. This time, Diane thought, "Well, if Suzanne thinks we can do it, then, by golly, we'll give it a try." It was, she says now, almost as if the nearly century-old house were calling them to save it.

So the couple embarked on their ambitious project, paying $115,000 to acquire the 1,200-square-foot house in August 2013 and then spending another $60,000 to transform it into the two-bedroom charmer it is today. The couple did most of the demolition and finish work (such as painting and laying the hickory floorboards) themselves. They hired professionals for more technical jobs, such as upgrading the plumbing and electricity, opening the ceilings and framing out the walls.

Though renovations famously test the most durable unions, these two found the process energizing and romantic. "It gives me joy to fix something that someone was ready to throw away, especially when I'm doing it with someone I love," says Diane. Indeed, notes Suzanne, "every part of this house is an expression of who we are and what we care about."

How to Find a Dream Retirement Home

1. Map a radius

Where are your daily activities centered? Where do your family and friends live? Is a 20-minute drive close enough to your loved ones? Is a short flight okay for seeing kids and grandkids? Are certain kinds of scenery or natural surroundings essential? Plot all those places on a map, and connect the dots to come up with a location that accommodates most, if not all, of your requirements.

2. Think about quality of life

Would you be happy with a smaller home if it gave you more money for travel? Is cold weather a deal breaker, or are you willing to compromise? What about an area that's less desirable than your ideal location? There's a lot to consider beyond house prices. An area's cost of living has a huge impact on quality of life, so before you buy, do some due diligence on property taxes, as well as state income and sales taxes. And don't forget energy costs. Cost of living calculators, such as the one offered by CNN.com, can help.

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3. Test-drive your location

A great place to visit isn't necessarily a great place to live. Many experts advise retirees to get to know an area in depth before taking the plunge with a home purchase. If there's a decent rental market, why not rent for several months before you buy?

4. Live for the long game

You may not need certain common "senior" features now, but single-floor homes, walk-in showers and bathtubs, and handrails can allow you to stay in your dream home longer. If you have these amenities from the beginning, so much the better. And living in an area with first-rate medical facilities can be a huge boon as you age.

5. Save money by seeking out "under-the-radar" locations

College towns offer rich cultural experiences and a diverse demographic comparable to what a big city provides — but usually at a lower cost. Towns that are a short drive from beaches or lakes aren't as pricey as properties on the water. In other words, if you want a deal, be willing to expand your search. —Charlie Young, president and CEO of ERA Real Estate