How did you decide where to live?

My wife and I are in the exploration stages of somewhere in France to retire to (less than 9 years) and we would appreciate any and all thoughts, wisdom or warnings in our endeavour.  While we have been to Paris 4 times in the last 5 years, we are much more interested in learning about a couple of specific towns.  Our needs will be simple: near an airport, must have a train station and local trams/buses for transportation as we will probably do without our cars as much as possbile.  We have had the opportunity to spend 5 days in Montpellier and absolutely loved it - as it met all our requirements.  But we obviously want to explore other options - such as Grenoble, Toulon and the lovely town of Vence (which we just visted while on a Meditteranean cruise from Rome to Barcelona and back to Monte Carlo (loved Cannes).  But we are also regular folks so the high budgets of Paris and Nice are out of our league but others may be possible.
As a guide - we our retirement income would be $5,000 per month and we would be looking to rent something with 2 bedrooms.  Are we being realistic? 
How did you decide where to live and are there any places or specific reasons you did not choose somewhere else?  Your help would be appreciated.

John & Robyn