At Physician on FIRE, we're constantly seeking resources and strategies to reach FIRE. This week, we're thrilled to share a special in-depth analysis compiled by Dr. Rob Anderson and the team at Marit Health, the physician-powered salary transparency site.
Marit has quickly become an invaluable resource for clinicians by providing detailed, anonymous, real-world salary data, helping physicians make more informed career and financial decisions.
When it comes to pursuing FIRE, your choice of where you practice can either accelerate or stall your progress. Compensation, cost of living, tax policy, and quality of life all vary widely across the U.S., and when taken together, they reveal some clear winners and surprising pitfalls. Understanding how these factors interact is key to optimizing your path to financial freedom.
In this report, we present a definitive ranking of the best and worst states for achieving FIRE as a physician, considering not only earnings and savings potential but also quality of life and the medical & regulatory landscape.
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How We Ranked the States
Physician careers can be long and demanding, so choosing where to practice involves more than just comparing salaries. The quality of life, community, and practice environment (including medical-legal conditions) significantly impact your career satisfaction and overall financial well-being.
To provide a holistic picture, we started with physician compensation data and adjusted for taxes, cost of living, quality of life, and malpractice environment metrics to create a unique “FIRE Index” – a comprehensive ranking to help physicians identify the best states to achieve financial independence while maintaining a balanced, rewarding lifestyle. The key inputs are:
Physician Salaries
Average physician compensation (across all specialties), including base pay, bonuses, and additional sources of income, directly from Marit's real-time physician salary database.
Taxes
Effective combined federal and state income taxes calculated using data from the Tax Foundation and state tax departments. States without income taxes (e.g., Florida, Texas) provide a clear advantage in net savings over high-tax states like California or New York.
Cost of Living
State-level cost-of-living indices were sourced from the Council for Community and Economic Research (C2ER). We used the average 2-adult, 2-child cost of living expense from the Family Budget Calculator on the Economic Policy Institute website. These estimates were adjusted upward to reflect typical physician spending patterns (larger homes, childcare, education expenses, etc.).
Quality of Life
Rankings incorporating healthcare quality, education, community safety, and overall livability, based on data from the WalletHub “Best States to Live In” report. High-quality-of-life states like New Hampshire and Massachusetts score well, even if they extend FIRE timelines slightly.
Malpractice Premiums (Practice Environment Indicator)
Average malpractice premiums from Gallagher's Malpractice Insurance Rate Survey. While typically employer-covered, higher premiums often indicate less physician-friendly practice climates; states with lower premiums, such as Wisconsin and North Dakota, reflect stable, supportive medical-legal environments.
Calculating the FIRE Index
Each state received a composite score based on these five inputs. To estimate how long it would take a physician to reach FIRE, we calculated annual savings as the difference between take-home pay (after state and federal taxes) and physician-adjusted living costs.
Using the widely accepted “25x rule,” which states that you'll need roughly 25 times your annual expenses saved to retire safely, allowing for a 4% annual withdrawal, we projected the timeline for each state, assuming a 6% annual investment return.
Additionally, we assumed an average student loan det of $300,000. While simplified, this calculation helps understand the dramatic differences between states where physicians can reach FIRE in under a decade versus those where it may take considerably longer.
Now, let's dive into the results!
The Top 5 States for Physicians to FIRE Faster
Based on our ranking, the following five states offer physicians the most favorable financial environment to expedite your journey to financial independence.
1. Wyoming (#1)
Image Credits: John Sullivan
Physician salaries in Wyoming average a remarkable $506k per year, among the highest nationwide. With zero state income tax and reasonable living costs, physicians can hit financial independence faster in Wyoming than almost any other state.
Wyoming also offers a uniquely favorable practice environment, reflected by its low malpractice risk and less stressful professional climate. The catch? You'll need to embrace rural living, wide-open spaces, and plenty of snow – but many physicians find this peaceful lifestyle ideal for saving and investing aggressively.
2. Wisconsin (#2)
Image Credits: Akira CA
Coming in second, Wisconsin physicians average about $481,000 annually. While there is a moderate state income tax, the cost of living remains quite affordable, especially outside Milwaukee. Wisconsin stands out with a notably physician-friendly practice environment, characterized by strong malpractice protections and an overall stable professional climate.
The state's appeal extends beyond finances, too—offering great schools, family-friendly communities, and lakefront leisure (though winters require some love for snow and Packers football).
3. Florida (#3)
Image Credit: Kiran
Florida's well-deserved reputation as a retirement haven is ideally suited for physicians seeking FIRE. Florida physicians earn roughly $457,000 per year, and there is no state income tax. The Sunshine State offers a balanced cost of living, plus attractive lifestyle options.
Although Florida's litigious environment can pose practice challenges, many physicians feel the trade-off is worth it, particularly given the tax benefits and year-round warm weather.
4. New Hampshire (#4)
Image Credit: Quintin Soloviev
New Hampshire climbs to the #4 spot thanks to an appealing balance of solid average physician salaries in NH around $429,000 and the advantage of zero state income tax. Despite slightly higher living costs common in New England, physicians here enjoy excellent overall quality of life—including great schools, safe communities, and beautiful natural surroundings.
The practice environment is stable, without the intense stress or high risk found in many states. If you appreciate a charming lifestyle close to mountains, lakes, and coastal getaways, New Hampshire offers a compelling path to FIRE in roughly 15 years.
5. Illinois (#5)
Image Credit: John Picken
Despite Illinois' reputation for taxes and costs around Chicago, the state makes the top five due to strong physician salaries in IL, paired with affordable options. While taxes and living costs can be higher in urban areas, smaller towns offer affordability.
Illinois' practice environment can be challenging due to malpractice litigation risks, but the robust healthcare market, rich cultural life, and diverse community options offer compelling reasons to choose Illinois.
Bottom 5 States (Where FIRE Feels Furthest Away)
1. Hawaii (#50)Image Credit: Prayitno
No surprise – Hawaii's paradise comes with considerable financial drawbacks. Physician salaries in HI average just $364,000, among the lowest nationally, while the cost of living (think million-dollar homes and sky-high grocery bills) is nearly double the U.S. average. Combined with an 11% state income tax, the result is a daunting >50 years to FIRE.
2. Rhode Island (#49)
Image Credit: Kenneth C. Zirkel
Charming but costly, Rhode Island presents tough conditions for physicians targeting FIRE. Average physician pay in Rhode Island is one of the lowest, around $324,000 due to a strong academic medicine presence and limited private-sector opportunities.
High living costs, particularly around Providence and coastal towns, imply that time-to-FIRE can be quite long. Rhode Island offers lovely coastal living and proximity to Boston, but expect to trade off rapid wealth-building for the New England charm.
3. Maryland (#48)
Image Credit: Matthew Binebrink
Maryland surprises many with its low ranking. While it's generally affluent, physicians in MD average just $328,000 in pay, reflecting a heavy academic and government medical sector. High costs, especially around Baltimore and D.C., plus combined state and local taxes approaching 8%, stretch the FIRE timeline.
Maryland's high-quality amenities—top schools, coastal recreation, cultural richness—are appealing, but the state's expensive lifestyle means working significantly longer for financial independence.
4. California (#47)
Image Credit: Alek Leckszas
Despite high physician salaries in CA (~$447,000), California's extreme costs quickly erode savings potential. Between the nation's highest state income tax (up to 13.3%) and soaring housing prices in major metropolitan areas, the estimated FIRE timeline in California is one of the longest in the country.
California's diverse lifestyle featuring beaches, mountains, and wine country is unmatched, and its malpractice environment is relatively stable. Still, physicians must be willing to work at least a decade longer than their colleagues in lower-cost states to enjoy the Golden State's perks.
5. New Mexico (#46)
Image Credit: Quintin Soloviev
This state isn't traditionally expensive, but the average physician salary in New Mexico is one of the lowest (around $365,000). Despite affordable living and moderate taxes, New Mexico ranks lower on quality-of-life scores, meaning the path to FIRE here is slower and not as desirable as other states.
Final Thoughts
The differences between states can be dramatic. If planned properly, a physician in Wyoming could achieve FIRE in less than a decade of working, whereas those in coastal cities may take 2-3 decades of work.
Of course, money isn't everything—family, community, and personal fulfillment also matter, and each situation is unique. And even within each specialty and location, there are wide variances in compensation, so there are lots of factors to choose from to decide what's best for you.
But if you do have the flexibility to choose where you live and work, choosing a state wisely could shave years off your journey to FIRE.
