The 5 best cities for FIRE supersavers to retire early

“Early retirement becomes a choice.”


Saving enough money to retire is an important goal, especially if you want to leave the workforce early. For followers of the FIRE movement, which stands for "financial independence, retire early," choosing where to settle down is a big deal.

FIRE adherents usually save and invest large portions of their income — perhaps 50% or more — so they can leave corporate life and often take up a side project they love. Some cities are better suited for building up and living off savings in the decades to come. Other, more expensive ones could quickly extinguish your FIRE plans.

A new MagnifyMoney study examined the 100 largest U.S. metros to find the best places for FIRE-motivated people, both before and after they quit their jobs. To make that determination, they created quality-of-life and cost-of-living scores, including concerns like the amount of crime in a given area. The rankings also considered the cost of state taxes, health insurance, and other essential goods and services, which can quickly eat up an early retiree's carefully planned budget.

The study's top pick for FIRE-minded people: Minneapolis. The Twin Cities score a 61.6 for cost of living and a 91.8 for quality of life out of a possible score of 100, according to the study. The worst place: High-tax New York City, which scores a 13.9 and 58.2 in those categories, respectively.

Here are the five cities that ranked best for FIRE supersavers:

1. Minneapolis, Minnesota

Cost-of-living score: 91.8
Quality-of-life score: 61.6
Final FIRE score: 76.7

2. Des Moines, Iowa

Cost-of-living score: 75.8
Quality-of-life score: 69.3
Final FIRE score: 72.6

3. Provo, Utah

Cost-of-living score: 77.3
Quality-of-life score: 67.7
Final FIRE score: 72.5

4. Madison, Wisconsin

Cost-of-living score: 76.6
Quality-of-life score: 66.2      
Final FIRE score: 71.4

5. Atlanta, Georgia

Cost-of-living score: 69.9
Quality-of-life score: 68.5      
Final FIRE score: 69.2           

Cost of living is important for FIRE but it isn't everything

Since FIRE adherents need to save a lot of money while they're working and stick to a budget once they're not, the cost of living in a given city is highly important.

While Minneapolis' roughly $318,000 median home value is higher than the national median, residents get a good deal on property taxes, effectively paying just over 1% (1.12%). By contrast, New York City has a median home value of $651,786 and a 1.72% property tax rate. 

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Yet many FIRE followers value family and personal passions over time at work, and they point out the cost of living isn't everything. "Deciding where to live in early retirement should consider personal variables that go beyond the cost of living, keeping finance personal," says Cody Garrett, a certified financial planner who specializes in FIRE planning.

"While living in a low-cost area may allow you to save more aggressively and arrive at early retirement even faster, the location may not align with your personal values and objectives," Garrett explains. "Many households within the FIRE movement prioritize living near family over the cost of living," and even very expensive locations can "have pockets of low-cost areas."

Planning for retirement with a FIRE mindset

Focusing on FIRE means saving and investing as much as you can and living on half, or even less, of what you make. But even those planning a more traditional retirement can learn lessons from FIRE fans.

FIRE adherents invest early and often in their retirement accounts. Even if you can't save half your income, you should aim to invest about 15% of your paycheck in a workplace retirement account (that includes both your own contributions and any your employer makes). With regular contributions over time, you can capitalize on the power of compound interest to help your money grow.

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Making a budget and sticking to it is another key principle. When it comes to saving more money, consider what spending brings real joy, and what can be cut to the bare minimum.

"Budgeting within the FIRE community is not about cutting expenses on the things you love, but rather about reducing spending on the things that don't provide value, so you can spend extravagantly on the things that do," Garrett says.

One of the best ways to embrace the FIRE mindset is by "paying yourself first" and living off what's left over. "I recommend determining the annual savings rate required to accomplish your FIRE objective, so you can automate your savings and still maintain your desired lifestyle," Garrett says. "It flips the script on normal budgeting; save first, then pay the bills, not the other way around."

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