We had this decision to make 6-7 years agoo, but in many ways it was easier for us as three of our four chidren had finished up living in the same village, but the other side of the country. We had been thinking of moving from our home at the far end of Cornwall, which we loved, to somewhere more convenient for visiting all members of the family, but they suggested that it made more sense for us to move into the same village, and our fourth 'child' was quite happy with this, as it would give her somewhere to stay for visits to us all.
It has worked out well. Being close is so handy for baby-sitting; parties; barbecues, and there is always someone around to look after pets while their owners are away (though this summer has produced some tight scheduling).
More importantly, when my husband had a serious illness, the practical help and moral support were invaluable. I would have hated to have faced that on my own.
Snags? Well, we do miss Cornwall and the countryside, and our larger house, but this was something we enjoyed in its time. We are lucky in that we all get on well together, and the grandchildren are a delight. We get unstinting help with odd jobs, and computer problems, and are kept fairly up-to-date. I would not like to live here on our own, but people are more important than places.
I would say it is good to do it as soon as possible. Moving home after 20 years is not easy, and better done while you are fitter. The younger company will help delay decrepitude - I have even gone back to cycling, not done since a teenager, and am now 'granny on a bike'.