Have you heard of FIRE or financial independence/early retirement? Even if you haven’t, you may be among the many Americans dreaming of retiring early, perhaps as soon as 40. Depending on your circumstances, you might use many strategies to make it happen. Whatever you choose, your home will factor into your strategy significantly.
While some argue you are best off choosing a city with very low living costs, an article from Redfin argues the opposite. Their chief economist, Daryl Fairweather, suggests you try to achieve early retirement by choosing a city where you can earn a high income. Which city is best for you in this regard will depend on your career.
You may want to retire in the same city you work in. If so, you’ll need a larger than average savings. However, these cities also have strong growth in the housing market so that you can protect your equity for the long term. Choosing your city and knowing how much it will take to retire there will help you set a realistic goal for your savings and give you some motivation to keep you from those budget-breaking purchases. That’s why we’d like the share the info from a recent Redfin article: cities where you can afford to retire before 40.
6 Cities Where You Can Afford to Retire Early
Here are six cities that are a wise choice, at least right now, to start working in and saving for your early retirement. We’ll also include how much you may need to retire there.
1. Tampa, Florida
Tampa is the cheapest city to retire in on our list. Redfin estimates you’ll need only $52,522 per year of retirement to live in this city. Despite that low cost, those who currently live in Florida make above average. The 75th percentile of income in Tampa is $207,000.
2. Chicago, Illinois
You’ll need slightly more—$68,222 per year—to retire in Chicago. However, saving that much may be easier if you can secure a good job in the city. The 75th percentile of earners here make $152,600. Furthermore, the cost of housing in this city is among the lowest on the list.
3. Baltimore, MD
Baltimore top earners make a significant amount of money. The 75th percentile of household income is at $170,000. And as you only need $73,673 per year of retirement in this city, you expedite your retirement if you can live on less for the time being.
4. Honolulu, HI
Hawaii living might be more akin to your fantasies of retirement, so you may be surprised to hear that it’s a real option. While housing and the general cost of living here is expensive, the median household income is strong too. Those in the 75th percentile of earners make $184,000. You may only need $77,806 to retire here.
5. Boston, MA
Of course, those who can live in Boston have to be strong earners. The 75th percentile of households make $207,500. Retiring here is expensive as well, and you’d need approximately $82,104 per year to do so. But don’t discount working in the city and retiring outside of it to reduce your costs.
6. Washington, DC
Washington is a similar story to Boston. Of course, those who can secure a job here make a high income. The 75th percentile makes just shy of what they would in Boston at $207,000. Yet you’d need more to retire here at $91,484.
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