6 U.S. Cities Where It’s Possible to Retire by 40

Man relaxing in a hammock
Photo by Mila Supinskaya Glashchenko / Shutterstock.com

If you want to live in a city that will boost your odds of retiring early, grab a pineapple, slip on a lei and book a flight to Honolulu.

The state capital of Hawaii tops the list of cities that are ideal places to live for top-earning workers who save aggressively in hopes of retiring early, according to a Redfin analysis.

Real estate company Redfin focused on places “where you can earn a high income, rather than simply a place with really cheap living expenses,” Redfin chief economist Daryl Fairweather says in a blog post.

In compiling its list, Redfin looked at typical workers who live in certain U.S. metropolitan areas and:

  • Earn a household income in the 75th percentile.
  • Start working at age 22.
  • Live in a median-priced two-bedroom condo.
  • Have annual nonhousing expenditures that rank as “average” and who save the rest of their cash.
  • Plan to maintain a stable cost of living and live on compounded savings and investment accounts from ages 40 to 85.

Honolulu might seem like a strange choice to top a list of cities for people who want to retire early.

It’s notoriously expensive to live in Hawaii, and early retirees — even those who earned big bucks during their working lives — typically have to pinch pennies to keep from running out of cash during an extended retirement.

However, Redfin agent Ali Ban says this little piece of paradise offers perks to today’s workers that will help them generate the wealth necessary to quit working early in life:

“Honolulu historically offers a great rate of home value appreciation, and there are many investment opportunities. If you are able to afford to retire here, you can’t beat the sunny weather and year-round beach and hiking. The amazing natural beauty draws many people to stay permanently, and Honolulu offers plenty of shops and restaurants.”

Other pluses include that Hawaii offers homeowners the lowest effective real-estate tax rate of any state, and Honolulu is one of the best U.S. cities for public transportation, as we have reported.

The top six U.S. cities for top-earning, aggressively saving workers who seek to retire early are:

  • Honolulu: An estimated yearly savings of $77,806 is needed to retire by 40
  • Boston: $82,104
  • Washington, D.C.: $91,494
  • Chicago: $68,222
  • Tampa, Florida: $52,522
  • Baltimore: $73,673

Remember, Redfin’s ranking is based on more than just the annual savings necessary to retire by 40. That’s why Tampa is No. 5 rather than No. 1.

How you can retire early, too

Do you hope to leave the rat race early? Doing so requires a lot of planning and self-discipline. And your odds of retiring early increase exponentially if you start saving at a young age.

As we explain in “18 Moves That Will Help You Retire Early and in Style“:

“Let’s say you’re 20 years old and can manage to put away $100 a month into your retirement fund. Assuming you average 8% returns — possible with good investments — you’ll have somewhere in the neighborhood of a half-million dollars by age 65. Even better, over that 45-year period, you’ll only have invested $54,000 of your money to get all that cash in return.”

All of this talk about saving truckloads of money simply in hopes of retiring early probably might bring the FIRE movement to mind. But Money Talks News founder Stacy Johnson says there are things about FIRE (“Financial Independence, Retire Early”) that leave him a little cold.

He explains why in “The FIRE Movement — Awesome or Awful?

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
10 Bad Money Habits That Are Robbing You Blind
10 Bad Money Habits That Are Robbing You Blind

Here’s how to change those bad behaviors.

Why Half of Retirees Now Owe Taxes on Social Security
Why Half of Retirees Now Owe Taxes on Social Security

Growing numbers of seniors are paying taxes on their Social Security benefits, but you might be able to avoid this fate.

9 Affordable Ways to Make Your Home Look Expensive
9 Affordable Ways to Make Your Home Look Expensive

These products from Amazon add elegance to your home without the expense.

Avoiding These 5 Foods Could Save Your Vision as You Age
Avoiding These 5 Foods Could Save Your Vision as You Age

Millions of Americans may be able to prevent an incurable cause of blindness by making a basic change.

The 10 Best and 10 Worst States for Raising a Family in 2020
The 10 Best and 10 Worst States for Raising a Family in 2020

There are trade-offs no matter where you live. However, some states have big advantages when it comes to choosing a home for your family.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?
Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?

Understanding survivors benefits rules is the key to getting the most from your benefit.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

These Are the 10 Worst Cars for Depreciation
These Are the 10 Worst Cars for Depreciation

Two types of vehicles are especially likely to see steep plunges in value.

Never Buy These 10 Things With Your Credit Card
Never Buy These 10 Things With Your Credit Card

Credit cards offer many conveniences and protections, but sometimes it’s simply smarter to keep the plastic tucked away.

13 Amazon Purchases That We Are Loving Right Now
13 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

10 Things I Always Buy at Trader Joe’s
10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

8 Surprising Household Items You Can Sell for Fast Cash
8 Surprising Household Items You Can Sell for Fast Cash

Sometimes, the humblest household items are worth the most money.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

There are easy high-paying majors available in the U.S. — and no bachelor’s degree is required. We’re here to help you find easy degrees that pay well.

Cut These 11 Expenses Now If You Hope to Retire Early
Cut These 11 Expenses Now If You Hope to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

5 Ways Social Security Will Change in 2021
5 Ways Social Security Will Change in 2021

These adjustments will affect both workers and retirees in the new year.

Stop Buying These 19 Things Online
Stop Buying These 19 Things Online

The internet has changed how we shop. But for some things, you’re still better off buying the old-fashioned way.

15 Products You Need — Even If You Didn’t Know It
15 Products You Need — Even If You Didn’t Know It

Discover some must-have products on Amazon that you didn’t even know you were missing.

7 Tips for Building an Emergency Food Supply
7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

8 Things You Should Buy at Restaurant Supply Stores
8 Things You Should Buy at Restaurant Supply Stores

You don’t have to be a chef or a restaurant owner to shop here.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.