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She may be ready to sell her home and move to assisted living where she would have peers to interact with (some are excellent, others not, so research and check references). Or maybe paid in-home help for her would work, with you just checking in on her regularly.
Living together works for some and it would be lovely if it did for everyone. But it can be very complicated. Just think it over carefully and maybe talk it over with several friends or even a counselor, before deciding. Meanwhile, give her all the help and support you can.
Carol
No matter what her reasons are, not withstanding the financial, do not move in with your mother.
Carol's advice is very sound - it is hard to reverse big decisions. I would however point out that it can work, or you may find alternatives that you haven't considered. I never thought I would have my mother live with me. But as luck would have it, she now does and we do get along just fine. Just look to yourself and ask what is the worst that could happen if you invited her to your house for a few weeks vacation....take it slow.
Your daughter may or may not thank you now. But I hope she will also benefit from extended family.
Take care.
My advice is DO NOT move in with her. It is not fair to you or to your daughter. Her loneliness is not a reason to move in. If she is unable to live alone due to health issues, or her house is too unwieldly for her, it would be better to have her move in with you (where you are in control), or help her find an assisted living arrangement.