Hi Just W(ant) to Retire:
I love these kinds of questions...no right answer, but makes one think.
As with almost anything in life, you can do what you want (Anyone can sue anyone; doesn't mean they will win, but we give them the right to do so.) So, the question is not if you "can", but if you "should". And, again, as with almost anything in life, only you can really answer your own question.
Yes, you can simply move out and quit paying your mortgage. In fact, over the past few years, many people have NOT moved out, and just quit paying. It is a violation of contractual law, however, so I would strongly suggest you contact an attorney, if you want a legal opinion. (But, whom would be asking such a question on Trulia.com if they wanted a legal answer?)
The hard part is determining if this is what is best for you...As I am assure you are aware, doing so will have a material negative impact on your credit scores. So, you have to ask yourself, "Do I plan to use credit again in the next 3-7 years to buy a car , another home or anything else which will be negatively impacted by my having turned my home back to the mortgage company?" These days, for example, almost all car insurance premiums are based on credit scores. Potential landlords look to your credit scores and how you have handled other real estate-related transactions (mortgages, rent, etc.) to determine if they want you as a tenant and how much security deposit and rent they feel they need to charge to overcome the risk you now represent. Etc., Etc.
If you don't care about your credit score, however, possibly because you truly do "just want to retire" and will not need credit in your lifetime, and you do not have a problem with the ethical question of renegeing on a debt, then I would think it makes sense to do so.
I hope this helps.
Bill Parker, CPA*