By Erica Sweeney
Everyone dreams of retiring someday. But retire early, in your 30s or 40s? As far-fetched as this fantasy may seem, there’s a name for this wish that could help make it happen: FIRE.
Short for Financial Independence, Retire Early, the FIRE movement finds its roots in the 1992 best-seller “Your Money or Your Life” by Joe Dominguez (a Wall Street financial analyst who — you guessed it — retired at 31) and Vicki Robin (who turned a modest inheritance into an income stream that allowed her to quit work at 23).
Although the idea of FIRE has been around for 25-plus years, it’s recently become the obsession du jour among a seemingly unlikely group: millennials. Say what you want about their adoration of avocado toast, but this group is gung-ho to quit the rat race ASAP. But how?
In a nutshell, the FIRE premise works like this: In your early working years, you adhere to a strict, even spartan, budget so you can sock away 40% to 70% of your income and wisely invest it.
FIRE requires some sacrifice: ditching or cutting way back on expensive/fun nights out on the town, exotic vacations, or even new clothes. (Hey, nobody said this would be easy.) But once this rapidly growing nest egg totals 30 times your yearly expenses, you’ve reached what’s called the “crossover point” where you can retire and live off the interest it generates for as long as you’re still alive and kicking. No job required!
While FIRE fans have a variety of strategies to reach these lofty goals, one key cornerstone to most FIRE plans involves buying a home — a well-priced one, in a town where the job market will allow you to bank plenty of cash.
So to help point you in the right direction, the data team at Realtor.com crunched the numbers and found where these FIRE-friendly enclaves are hiding, so you can embark on your own early path to retirement right now.
“Owning a home helps you build equity, forces saving — and, if you buy correctly, you’ll have your home paid off quickly,” says Ilyce Glink, founder and CEO of financial wellness platform BestMoneyMoves.com. At that point, you can either sell the place for a fat profit or rent it out, turning it into an income-producing asset.
Glink cautions that would-be FIRE followers need to be sure not to overly stretch their budget: Monthly housing costs should ideally fall well below 28% of gross monthly income (and well below the national median home price, which currently hovers around $305,000).
To find these areas that can help you get your FIRE mojo going, our data team scoped out your prospects in the nation’s top 150 metropolitan areas (which include the main city and surrounding suburbs and smaller cities). We looked at the following factors*:
Lowest home sale prices
Lowest cost of living
Lowest property taxes and lowest or no state income tax
Highest median wages
Highest percentage of high-paying jobs
We also narrowed the list to include only one metro per state so that FIRE is achievable regardless of where you live.
And once you do reach this crossover point yourself? Learn Esperanto! Take up cave diving! Read Proust! Volunteer! And while the sky’s the limit as to where you head next (check out our list of the fastest-growing cities for retirement if you’re in need of ideas), these cities below could also be great places to stick around and grow old. Like, beyond 40.
1. Huntsville, Ala.
Average salary: $54,630**
Percentage of high-paying jobs: 28.1%
Median home sale price: $202,900
This Southern city is anything but sleepy, since it serves as home to the NASA Marshall Space Flight Center, the U.S. Army’s Redstone Arsenal, and offices for Lockheed Martin /zigman2/quotes/200691238/composite LMT -2.28% , Boeing /zigman2/quotes/208579720/composite BA -2.41% , and Northrop Grumman /zigman2/quotes/205518355/composite NOC -3.39% . With such aerospace, defense, and tech heavyweights in the area, Huntsville is famed for its educated workforce and sky-high wages to go with it.
Paired with Huntsville’s low home prices and a cost of living 3.3% lower than the national average, it’s a FIRE-friendly combo at its best — and people are catching on.
“The market is going crazy,” says local real-estate agent Sid Pugh of Re/Max Alliance. With three historic districts around the downtown area (Old Town, Twickenham, and Five Points), Huntsville has the largest collection of historic homes in the state of Alabama. Not up for a fixer-upper? More modern loft living abounds in the recently revitalized downtown area, including the recently renovated Terry Hutchens Building, or 200-unit Artisan Lofts.
And although prices are creeping higher to meet the demand, Matt Curtis of Matt Curtis Real Estate says deals can still be found.
“Home prices here are still very affordable, with the average cost still in the low $200,000s,” he says. In fact, homes for well under $200,000 exist in the communities of Ashbury, Georgetown Square, and Madison, where this three-bedroom house is priced at a mere $155,000.
2. Knoxville, Tenn.
Average salary: $45,130
Percentage of high-paying jobs: 19.3%
Median home sale price: $192,500
Knoxville has a lot going for it on the FIRE front. For starters, Tennessee has no state income tax and local property taxes are low, according to agent Laura Slyman of Slyman Real Estate.
As a result, “Knoxville is an easy place to live, to raise a family, or to retire,” she says.
This easy living is further enhanced by the area’s strong job market, with the largest employers being the U.S. Department of Energy and the Oak Ridge National Laboratory. Most of the highest-paying gigs here are in sectors relating to science, government, or health services.
Meanwhile, with a plethora of five-star restaurants and nightlife combined with plenty of greenways and the scenic Smoky Mountains in the distance, Knoxville is often referred to as a “small big city” catering to urbanites and outdoorsy types alike, with a variety of affordable housing options.
North Knoxville is an up-and-coming neighborhood with historic properties that would make great investments. Check out this newly renovated cottage with a spacious back deck priced at $164,900.
3. Dayton, Ohio
Average salary: $50,100
Percentage of high-paying jobs: 21.5%
Median home sale price: $146,000
As hometown to the Wright brothers and, currently, the Wright-Patterson Air Force Base, Dayton is steeped in aviation history that’s still present today. Aerospace and defense are some of Dayton’s top industries, along with manufacturing thanks to heavyweights Cargill and PepsiCo /zigman2/quotes/208744353/composite PEP -1.33% .
And these businesses have fueled not only this area’s demand for high-paying jobs, but also the development of 20 city parks, more than 330 miles of biking trails, and a bike-share program. Meanwhile a revitalized downtown seeks to attract millennials by building everything from microbreweries to a new crop of green urban living environments like the Litehouse, which features a private, cobblestone interior street that oozes European charm.
The streets of Dayton are also lined with grand old fixer-uppers being remodeled and flipped for decent prices. For instance, this charming vintage-style home built in 1919 boasts a new bathroom, new flooring, even a new roof and water heater, all for a mere $79,900.
4. Peoria, Ill.
Average salary: $51,510
Percentage of high-paying jobs: 21.7%