Don Cardi, while thinking over your post, I find it fits in most thematically with the film, and here's the reason:

Some people may wonder why I should even be curious about such a trivial matter as what Fredo lived on and where he lived after Michael severed ties with him. But, IMO, it has some significance to the common thread that runs through the ending murders of GF2.

As Apple said, Vito probably left a sizeable inheritance to his children. They could have received their respective shares soon after the will was settled; and they would have had more than enough to live on, invest, or spend as they wished. If this were the arrangement, then once Michael "fired" Fredo from his life, Fredo could take his money and move to Canada for all Michael would know.

But this would not be in Michael's best interest. As Don Cardi noted, he would want Fredo close enough to keep an eye on: to make sure he doesn't deliberately or inadvertently put Michael's life at risk again. And the best way to keep Fredo close was to keep him dependent on Michael for regular financial support. This is why I think it's likely that Vito stipulated his children's inheritance be paid out periodically instead of in one lump sum, and that he appointed Michael as the trustee for overseeing this. Maybe living "close to home" was one of the payment conditions, or maybe Michael (via a 3rd party) convinced Fredo that it was.

One of the reasons I often see given as justification for Michael killing Fredo is that, because of the depth of his resentment and/or because of his witlessness, Fredo could put Michael in danger again. But I think this goes against the grain of the ending murders. In contrast to the murders of the rival family heads in GF1, Michael's victims at the end of GF2 are weak and powerless. I think we are meant to see how far Michael has fallen morally because he kills them anyway, even though they pose no threat to him should they live out their natural lives.

Roth is terminally ill and will die in prison. Pentangeli would not dare cross Michael after he witnessed how Michael's reach extends to Sicily and Pentangeli's brother. And I believe that Fredo would not betray Michael again, for several reasons, one of which is the fact that in the interim years that Mama was alive, he committed no further incidents of treachery. One might argue it's because Michael kept a close eye on him; but it then begs the question Why doesn't Michael just continue to keep close watch over him? After all, if Mama lived to be 97, he'd have to do just that.

But of course, if Fredo did have his own inheritance money or independent means and if he did move to another state far from Michael's HQ, then it gives more support to the argument that Michael killed Fredo because he believed Fredo would betray him again. After all, distance makes Michael less in the know about who Fredo is associating with, how much or how little resentment he still might feel, etc. However, I don't think this scenario ties in with the ending theme, which I believe is to show that the ending murders were unnecessary, just as it was unnecessary to sacrifice someone like Rocco in order to kill a toothless rival (Roth) who would soon die in prison anyway.

But no matter where he lived or what he lived off, Fredo still didn't get any respect.