Choosing the perfect place to retire can elicit dreams of sandy beach towns and lush golf courses. However, those dreams can often look a bit different for subscribers to the FIRE (financial independence, retire early) lifestyle.
“Since the primary goal of the FIRE movement is to retire quickly, adopters need to focus on “living frugally enough to save and invest huge chunks of their income, like 60% or 70%,” MagnifyMoney content director Ismat Mangla says. “Most people need to live a somewhat austere life to get to this unless their income is atypically high.”
MagnifyMoney evaluated the 100 largest U.S. metros to find the places best suited for FIRE goals. The top 10 metros that researchers identified as best for FIRE-motivated individuals crop up in various states throughout the U.S. Still, they all fall in the Midwest, West and South.
Texas stands out as the only state with two metros in the top 10.
According to their research, El Paso features the best cost-of-living score among the top 10 metros — but it gets dragged down by the worst quality-of-life score among the top 10. Cheap goods and low tax rates make El Paso an attractive option for FIRE-minded folks, but a high average of poor physical health days a month might deter them.
Though the South contributes four metros to the top 10 — Atlanta; Austin, Texas; Raleigh, N.C.; and El Paso, Texas — only Atlanta cracks the top five.
Where Atlanta and Austin stand out is their parity across the cost-of-living and quality-of-life scores.
San Jose, for example, has a 66.1 point difference between its two scores in the index — most significant among the 100 metros. Outside of Rochester, N.Y. — which scores low in both fields — Atlanta and Austin have the most negligible point differences across the 100 metros at 1.4 and 1.6, respectively.
Atlanta’s solid cost-of-living score is due to the low average effective tax rate in Georgia.
Raleigh, N.C. follows a similar pattern but with a slightly wider margin (3.3) between its two scores due to high health insurance costs in North Carolina.
Among the top five places for those planning to retire early, three are in the Midwest — Minneapolis (first), Des Moines, Iowa (second) and Madison, Wis. (fourth).
While recent headlines might make Minneapolis seem like the last place where one might want to go to relax, MagnifyMoney researchers found a high quality-of-life score here that helped the Twin Cities earn the top spot.
Researchers created cost-of-living and quality-of-life scores across the 100 metros, looking at items from local pricing for goods and services and health insurance costs to the number of average poor health days a month and the number of reported violent crimes.
- Minneapolis is the best place for FIRE early retirement. Although the state’s high average effective tax rate pushes Minneapolis’ cost of living higher, quality-of-life factors — including a lower violent crime rate — help push the metro to the top of the rankings. Des Moines, Iowa, and Provo, Utah, take the next two slots.
- New York is the worst place for early retirement. The metro has the worst cost-of-living score among the 100 that were examined, led by New York state having the highest average effective tax rate in the U.S. Syracuse, N.Y., and New Orleans take the next two slots.
- Southern states dominate MagnifyMoney’s cost-of-living score. Among the 10 metros with the best cost-of-living scores, eight are in the South. Two Texas metros — McAllen and El Paso — are at the top, followed by Knoxville. Tenn. Neither Texas nor Tennessee collect personal income taxes, making them more intriguing for some.
- The states with the highest quality-of-life scores are spread across the U.S. The leading metros are Bridgeport, Conn., San Jose, Calif., and Minneapolis.