Any discussion of retirement comes with more baggage than a Kardashian on vacation. For some, it means relaxing days on the beach; for others, itâ€™s all about the grandchildren. But whatever your plans, deciding where to retire is a huge decision with major ramifications for how much you need to save and how much youâ€™ll have to spend.
The question of where to retire is even more central for people pursuing FIRE, an acronym standing for â€śfinancially independent, retire early.â€ť The FIRE approach to retirement has become popular among many younger, millennial savers in recent years. In a nutshell, practitioners of FIRE aim to retire as early as they can, but only once they have achieved a level of financial independence that would free them from conventional employment. The core strategy for building a nest egg that would allow one to retire early is to adopt extremely frugal saving and spending habits.
Successful FIRE retirees anticipate supporting themselves with savings and investments for 30 or 40 years â€” or even longer, depending on how early they drop out of the workforce. With FIRE, itâ€™s vitally important to choose a place to live thatâ€™s affordable enough to sustain financial independence for several decades. However, just because a community is affordable doesnâ€™t mean itâ€™s necessarily a place you would want to spend several decades.
To find the best communities in the United States for affordable living and a great quality of life, MagnifyMoney has assembled data on 171 cities and towns, and ranked them based on how appealing they may be for FIRE early retirees.
As you can see from the map below, the communities we looked at in our study range from sea to shining sea. Click the bar at the bottom of the map to filter the communities by ranking and youâ€™ll find the top-ranked communities to mostly be in the South.
Because the best city in the Midwest doesnâ€™t even crack the overall top 20, itâ€™s helpful to refer to the tables below listing the 20 highest-ranking (and the 20 lowest-ranking cities) that were included in our study of best communities for financially independent people seeking early retirement, which break down the cost of living and quality of life score by city. True FIRE devotees may decide a localeâ€™s low cost of living outweighs a weak quality of life score.
This small central Florida town provides financially independent early retirees giant savings, thanks to its impressively low cost of living. They can enjoy the Florida sunshine and numerous nearby golf courses while benefiting from a cost of living thatâ€™s about 17% to 18% below the national average â€” meaning $40,000 is worth roughly $50,000. Combine that with the townâ€™s median home value of $134,600 and the Sunshine Stateâ€™s lack of an income tax, and you can see why your money could go further in Sebring.
If money isnâ€™t a limiting factor in your decision of where to retire, than you canâ€™t do much better than this northern California town. The approximately 175,000 residents of this town report the fourth-highest satisfaction with their physical fitness, according to Gallup polling, and the pleasant summers and mild winters of this community make it a slice of paradise. But paradise comes with a price, in this case a high cost of living (21% over the national average) and a median home value of $578,700.
While the numbers donâ€™t lie, we understand there could be reasons someone might prefer another region than the South. To accommodate geographic preferences, weâ€™ve reviewed the best and worst community in each of the countryâ€™s four major census regions for people who want to be financially independent and retire early.
Barnstable, Mass. was the only town from the Northeast to break the top 20 overall. Notably, the cost of real estate isnâ€™t exactly cheap â€” Barnstableâ€™s median home value stands at $383,400. Still, health care is less expensive than the national average, with the cheapest Affordable Care Act Silver plan monthly premium (our standard for measuring a stateâ€™s healthcare costs) at $323, compared to the average of $452.
Where Barnstable really shines is with how satisfied its residents are. In the Gallup pollâ€™s State of American Well-Being report, Barnstable ranked first in the nation in terms of community and residentsâ€™ sense of enjoyment, safety and pride.
Sounds like the kind of place you might want to spend your early retirement.
President Gerald Ford may not have literally told the Big Apple to drop dead, but FIRE retirees probably should. As you might expect, New York ranks dead last in not only the Northeast, but in the entire nation for high cost of living. Perhaps more surprisingly for folks whose ideas of life in NYC may have been molded by binge-watching Friends, the city ranks rather low in our quality of life metric, as well.
This Midwestern gem ranks as the regionâ€™s most desirable place for FIRE early retirement, thanks largely to its affordable cost of living and pretty good quality of life. Healthcare is fairly inexpensive in Michigan, with the average monthly premium of the cheapest ACA Silver plan at $367 versus the national average of $452.
The purchasing power of a Grand Rapids resident is also greater than the national average: An income of $40,000 actually has the purchasing power of $42,780, a difference that adds up over the years. The median value of a home in Grand Rapids is $159,700, well below the national average of $226,300.
All-in-all, it adds up to a good deal for FIRE retirees looking to stretch their savings as much as possible.
The Windy City will quickly extinguish the savings of FIRE retirees. Illinois collects $1,237 per capita in state and local income taxes â€” the 13th highest amount in the nation â€” and out of 183 locations, Chicago itself ranks 110 in the social realm and 146 in terms of community, according to Gallupâ€™s State of American Well Being report. Also, have you ever been there in winter? Brrr.
According to our research, the top-ranked community in both the South and the entire nation is Naples, Fla. While healthcare costs a little more in Florida than the rest of the nation â€” the benchmark ACA Silver plan monthly premium costs $461 versus $452 national average â€” the lack of an income tax is a big boon to FIRE retirees who may still be earning supplemental revenue.
Living in Naples may cost a little more than the national average, but the happiness of its residents is through the roof. The community ranks either number one or two in all five categories of community well-being as measured by the Gallup pollâ€™s State of American Well-Being, and has topped the reportâ€™s overall list for the third year in a row.
No matter where you fall on the political spectrum, you probably think thereâ€™s plenty wrong with our nationâ€™s capital â€” and youâ€™re right, at least as far as a FIRE early retirement goes. The median value of a home in D.C. is $579,200 and the cost of living in general is 19% more than the national average, which would eat away at retirement savings.
Letâ€™s be upfront about the cost of living in California â€” youâ€™re going to be paying lots of taxes for your residency in the Golden State. California collects $1,991 per capita in state and local taxes â€” the fifth-highest rate in the nation â€” and levies a sales tax of 8.55%. However, healthcare is cheaper than the national average ($407 vs. $452 when comparing our benchmark plans) and the cost of living in Visalia is 5.4% cheaper than the average cost of living in the country.
People living in Visalia seem satisfied with their hometown â€” the Gallup poll ranks the community as the third-happiest in the nation when it comes to having supportive people and meaningful relationships in their lives. Thatâ€™s a heartening statistic when you consider they could be your neighbors for several decades.
Rocky Mountain highs may appeal to many, but not if youâ€™re thinking of settling down for an affordable FIRE early retirement. Denver boasts a cost of living higher than some of its residents â€” an income of $40,000 only goes as far as about $37,700, while the median house value of $427,300.
Before you call the movers and retire early, youâ€™ll have to achieve financial independence under the FIRE approach to saving. Here are some tips on how to meet your savings goal and get on with enjoying life after work while youâ€™re still in your prime.
MagnifyMoney evaluated 171 communities in the United States to find the places most hospitable to financially independent early retirees who are utilizing different FIRE strategies. The two major criteria to determine which places were best were cost of living and quality of life.