In my opinion, retirees definitely should not pay all cash. Once they tie up a large portion of their money in a home, it's often very difficult to get it back. They're better off in a more liquid position, in which funds are available for emergencies or short-term investment opportunities.

The best time to borrow money is when you're in good health and working with an adequate income, not when you absolutely need the money and are not working.

Even if you can afford to pay all cash for the replacement home, you're better off making a minimum down payment and taking the maximum home loan available.