These Are The 6 U.S. Cities Where You Can Retire by Age 40

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Updated on September 16th, 2021

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Paradise found: Honolulu is the best place for high-earning–yet thrifty–workers to retire early. 

 

If you dream of retiring by age 40, consider moving to Honolulu.

No, really. According to a new Redfin analysis, the Hawaiian paradise ranked number one among U.S. metros where top earners who save aggressively can retire by age 40.

Of course, saving to retire early won’t translate into a life of sipping coconuts either. Our calculations are based on those who earn a household income in the 75th percentile, start working at age 22, live in a median-priced two-bedroom condo, have average annual non-housing expenditures and save the rest. They also must then maintain the same cost of living by relying on compounded savings and investment accounts from age 40 until age 85. 

“Many people dream of retirement, especially after a grueling day at the office. But accomplishing it by age 40 can feel especially lofty, short of winning the lottery. But it’s not impossible. If you want to make it happen, your best strategy is to focus your efforts on living where you can earn a high income, rather than simply a place with really cheap living expenses,” said Redfin chief economist Daryl Fairweather. “Saving up for early retirement requires earning enough to afford to put away thousands of dollars each month. It takes a lot of discipline to maintain such a frugal lifestyle, especially when you can afford not to. But the payoff, for some, to retire decades early might be well worth it.”

In other words, it won’t be glamorous. Maintaining such a low cost of living might also mean opting for unpopular neighborhoods, living in an older property, and adhering to a fiscally frugal routine. 

But then again, you very well might still be in Hawaii.

“The island lifestyle and the very real concept of showing ‘Aloha’ to the people around you is what makes Hawaii so welcoming and attractive, especially for people with a lot of time for leisure. But it’s not cheap to buy a home and live in Hawaii. Not just for real estate, but everyday things like food and gas are much more expensive than on the mainland,” said Redfin agent Ali Ban. “However, 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. For a slower pace, check out the North Shore and west side, as well as less densely populated islands such as Maui, Kauai or the Big Island.” 

For those who’d prefer life on the mainland, Boston and Washington, D.C., followed close behind, as other viable options when meeting the same requirements. 

Dreaming of spending your golden years out of the office? These are the six U.S. metro areas where early retirement is possible, assuming you meet the following financial criteria:

1. Honolulu, HI
Median sale price of a two-bedroom condo: $425,000
Total non-housing expenditures: $40,745
75th percentile median household income: $184,000
Estimated yearly savings needed to retire by 40: $77,806

2. Boston, MA
Median sale price of a two-bedroom condo: $614,000
Total non-housing expenditures: $45,301
75th percentile median household income: $207,500
Estimated yearly savings needed to retire by 40: $82,104

3. Washington, D.C.
Median sale price of a two-bedroom condo: $325,000
Total non-housing expenditures: $50,820
75th percentile median household income: $207,000
Estimated yearly savings needed to retire by 40: $91,494

4. Chicago, IL
Median sale price of a two-bedroom condo: $220,000
Total non-housing expenditures: $39,328
75th percentile median household income: $152,600
Estimated yearly savings needed to retire by 40: $68,222

5. Tampa, FL
Median sale price of a two-bedroom condo: $142,500
Total non-housing expenditures: $31,522
75th percentile median household income: $115,375
Estimated yearly savings needed to retire by 40: $52,522

6. Baltimore, MD
Median sale price of a two-bedroom condo: $200,000
Total non-housing expenditures: $45,878
75th percentile median household income: $170,000
Estimated yearly savings needed to retire by 40: $73,673

If you are represented by an agent, this is not a solicitation of your business. This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional. Consumers should independently verify any agency or service mentioned will meet their needs. Learn more about our Editorial Guidelines here.
Emily Hochberg

Emily Hochberg

Emily Hochberg is Redfin’s Lifestyle Editor, covering topics related to culture, trends, personal finance, decor, style and more. When not busy typing away, find her daydreaming over Redfin listings (seriously, should she buy and fix up a beach house in Hawaii?) or obsessively planning where to travel next.

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