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Study: The Best U.S. Cities for Working from Home

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Working from home has never been easier. Thanks to advances in technology, many professionals can plow through their to-do lists from the comfort of their couch. However, some cities are better for remote work than others.

Cities that are more appealing to telecommuters have higher earning power for the remote workers who live there and more remote work opportunities. Additionally, cities with longer commute times also make it more appealing for residents to choose to work from home.

To determine the best cities for working from home, MagnifyMoney combed through the Census Bureau’s 2018 1-Year American Community Survey. We examined the 100 largest U.S. cities by the number of workers, classifying them by metrics related to how many people work from home, their earning power and their cost of living.

Key findings

  • Gilbert, Ariz. is rated the best place to work from home, due to a sharp rise in the number of people working from home, which indicates more remote work opportunities, as well as the fact that remote workers there make $1.32 for every dollar earned by the average worker.
  • The second best place to work from home is Atlanta, thanks to factors like a rise in people working from home from 2017 to 2018 and good pay for remote workers. Additionally, local housing costs in Atlanta were equal to just 27% of earnings for the average person who works from home.
  • Aurora, Colo. comes in third, with residents who work remotely skipping out on the 30-minute average daily commute there.
  • The worst city to work from home was Toledo, Ohio, which had a low and stagnant number of people working from home, indicating few remote work opportunities. Those who do work from home in Toledo generally earned less in comparison to average earnings.
  • The second worst city to work from home was El Paso, Texas, followed by Greensboro, N.C.
  • On average, across the 100 cities analyzed, working from home tended to pay better than not working from home.
  • Overall, the number of people working from home is fairly flat, suggesting that the so-called “telecommuting revolution” has yet to come to fruition.
  • Long commutes did not necessarily translate to more people working from home. While New York and New Jersey had the longest average commutes, they did not see much of an increase in the number of people working from home.

Best cities for working from home

Topping our study’s ranking of the best cities to work from home is Gilbert, Ariz. Gilbert, a suburb located southeast of Phoenix, measures just over 72 square miles and has a population of more than 230,000.

Our study found that the average person working from home in Gilbert makes $1.32 for every dollar the average person makes, earning it a tie for the 20th spot regarding that metric. Gilbert also ranked high for two metrics measuring the city’s overall work-from-home climate. It ranked fourth for its share of remote workers, with 4.90% of residents working from home, and sixth for the percent change in the number of people working from home from 2017 to 2018, a 1.20% year-over-year increase. Additionally, the average commute time of a typical worker in Gilbert is 28 minutes, earning Gilbert the 27th spot for that metric as telecommuters are saving nearly half an hour each way.

All of these metrics contributed to Gilbert’s overall top ranking, making it a great option for telecommuters looking for a balanced lifestyle of good pay, a remote work-friendly culture and a decent chunk of time saved from commuting.

Atlanta snags the spot for the second best city to work from home, thanks to the high earning power of remote workers and a culture friendly to telecommuting. Atlanta has a high work-from-home rate, with 4.50% of people working from home, earning it a sixth-place ranking for that metric. Remote workers in Atlanta make $1.13 for every dollar the average worker pulls in, and housing costs accounted for just 27% of a remote worker’s earnings, landing it the 22nd spot for that metric.

Rounding out the top three for our study on the best cities to work from home is Aurora, Colo. Aurora’s rankings were boosted by the fact that remote workers in Aurora make $1.41 for every dollar that the average person makes — earning the city the 11th spot for that metric. The city also boasts 3.50% of people working from home, which landed it in 19th spot for that metric. Additionally, workers in Aurora had an average commute time of 30 minutes, which means, conversely, remote workers get to skip out on a half hour long-commute, earning the city the 18th spot for the commute time metric.

Overall, the best state to work remotely seems to be Arizona — three cities, all Phoenix suburbs, cracked our study’s top 10 best cities to work from home ranking: Gilbert (first), Chandler (seventh) and Scottsdale (tenth). Another state with a strong presence in our study’s top 10 best cities to work from home is Colorado, with Aurora ranking second and Denver ranking sixth.

Worst cities for working from home

The U.S. city falling to the bottom of our study’s ranking — making it the worst city to work from home — is Toledo, Ohio. Located in the northwest region of Ohio, Toledo has a population of around 276,000.

Remote workers in Toledo pulled in far less than the average worker, earning just $0.58 for every $1 earned by an average worker and resulting in the city ranking 99th for that metric. Additionally, remote workers in Toledo spent an average of 51% of their earnings on housing, underscoring remote workers’ overall low earning power. Toledo also had a staggeringly low percentage of residents working remotely — 0.90% — which indicates the poor overall culture of remote work and opportunity in the city.

The second worst city to work from home, according to our study, is El Paso, Texas. Remote workers in El Paso also had dismal earning power, with people who work from home making just $0.81 for every dollar earned by the average worker, and housing costs accounting for 45% of remote workers’ earnings. Like Toledo, El Paso also had a relatively low percentage of remote workers overall, with 1.60% of people working from home, placing the city 87th for that metric.

Meanwhile, our study found that Greenboro, N.C., is the third worst city to work from home. Greensboro ranked last for the metric measuring the growth in the number of people working from home, with 1.90% fewer people working remotely in 2018 compared to 2017, indicating a possible decline in remote work opportunity there. Remote workers also weren’t saving a particularly significant amount of time by telecommuting, with the average commute time for residents in Greensboro being just 21 minutes.

Overall, our study found that there are bad cities for working from home nationwide, from the Northeast all the way to the West Coast.

What happened to the “telecommuting revolution”?

Roughly a decade ago, as technology became more advanced and workforces became increasingly mobile, there were predictions of a “telecommuting revolution” in which more and more employees would begin working remotely.

Indeed, a recent study from FlexJobs found that between 2005 and 2017, remote work has grown 159%. However, this massive explosion in growth in the last decade and a half slowed to just 7.9% between 2016 to 2017 — evidence that the movement is losing steam.

Our study also found a fairly stagnant remote workforce in the 100 most populated U.S. cities from 2017 to 2018. Even the city that ranked first for the metric measuring the growth of the number of people working from home from 2017 to 2018 — Irvine, California — had just a 2.40% increase in the number of telecommuters. Additionally, our study revealed a slew of cities in which there were a smaller share of remote workers in 2018 than there were in 2017, including Washington D.C., Orlando and St. Louis.

While the number of remote workers might not be completely stagnant, these are certainly signs that the telecommuting movement might be slowing down. So, what’s to blame for the seemingly slowing growth of the “telecommuting revolution”? One explanation might be linked to perceived worker productivity. In 2013, for example, Yahoo yanked its employees’ remote privileges and shortly after cited increased levels of productivity and employee engagement.

Additionally, a 2018 survey from Randstad USA found that employees might not be buying into the idea either. While 82% of workers said being able to work from home helps them maintain their work-life balance, 62% said they still prefer working in the office, a number that was even higher among younger generations.

Advantages and disadvantages of working from home

As is the case with clocking your 9-to-5 hours in a cubicle, there are both advantages and disadvantages to working from the comfort of your couch.

Advantages of working from home

  • Potentially higher pay: Our survey found that in many cities, remote workers raked in more money than non-remote workers. For example, in Norfolk, Va., the average remote worker made $1.68 for every dollar earned by the average worker. One reason for this could be that, according to the BLS, the more popular occupations for remote work include jobs in management, business and finance, all of which tend to be higher-paying.
  • Money saved on transportation: The cost of commuting is not something to overlook. Depending on the state in which you live, you could spend between $2,000 to $5,000 a year on commuting costs. Working from home enables you to save thousands of dollars a year.
  • Money saved on childcare: One of the biggest incentives for working from home is the flexibility it allows — especially for parents with kids to care for. For working parents, the cost of childcare can add up to hundreds of dollars a week. If a parent works from home, they might be able to avoid paying for a daycare service or nanny.

Learn how you can maximize your savings with the best online savings account offers. 

Disadvantages of working from home

  • Strain on relationships with colleagues: Working from home could have a negative effect on your relationships with your colleagues. At least one study has found that remote workers were more likely to report that their co-workers treat them poorly and exclude them.
  • Lack of work-life balance: When your home doubles as your workspace, it can be difficult to unplug. Indeed, one survey from Remote.co found that unplugging after work hours is the biggest challenge among telecommuters. Achieving a healthy work-life balance when you work from home can certainly be a challenging obstacle to overcome.

Methodology

For our study, we looked at data from the 2018 Census Bureau’s 1-Year American Community Survey. Metrics analyzed included:

  • The percentage of people who work from home.
  • Earnings for people working from home relative to average earnings of local workers.
  • The percentage point change in the share of workers working from home from 2017 to 2018.
  • The percentage point change in earnings for people who work from home from 2017 to 2018.
  • Housing costs as a percentage of income for people working from home.
  • Average commute time.

To create the final rankings, we ranked each city in each metric. Using these rankings, we created a final index based on each city’s average ranking. The city with the best average ranking received the highest score, while the city with the lowest average ranking received the lowest score. The cities were then indexed based on the best possible score.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Sarah Berger
Sarah Berger |

Sarah Berger is a writer at MagnifyMoney. You can email Sarah here

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Survey: 3 in 4 Americans Believe Physical Banks Are Becoming Obsolete

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Thanks to the fintech revolution and ever more sophisticated bank apps, some aspects of banking — like paper checks and statements that come in the mail — seem pretty outdated. For many Amercians, bank branches are also increasingly seen as redundant.

A new survey from MagnifyMoney, a LendingTree company, found that 3 in 4 Americans think that physical bank branches are becoming a thing of the past, and nearly 8 in 10 do all of their banking online or via a mobile app.

Key findings

  • Approximately 3 in 4 of survey respondents say physical bank branches are becoming “a thing of the past.” Unsurprisingly, millennials and Gen Z are most likely to hold that opinion, but the sentiment is also shared by more than two-thirds of baby boomers.
  • More than 1 in 10 Americans with bank accounts didn’t set foot in a bank branch in the last year, and an additional 15% haven’t visited a branch in at least the last six months. Gen Xers are the least likely to have visited a branch in the last year.
  • There’s an app for that… and people are using it. Nearly 8 in 10 conduct all of their banking business online or via a mobile app whenever possible. Still, people still see in-person interactions with their bank as valuable, with almost 50% of respondents saying this is their preferred method of communication with their bank.
  • Credit union account holders visit their bank’s physical location less frequently than those who use a traditional bank, and they’re more likely to prefer online banking.
  • Making a deposit is the most common reason cited by respondents for visiting a bank branch, followed by making a withdrawal.

Americans are visiting bank branches less often

Our survey reveals that trips to the bank are becoming increasingly rare. The survey found that 29% of Americans say they typically only visit bank branches a few times a year, while 14% say they go less than once a year. The survey shows that the most common reason for a respondent’s most recent trip to a physical bank was to make a deposit (39%), followed by making a withdrawal (32%).

Surprisingly, the frequency of trips to physical bank branches doesn’t differ too much among generations. However, younger people were more likely to agree with the statement that physical banks are becoming a thing of the past, including 89% of Gen Zers, but only 68% of baby boomers.

In an era in which finding a date or having pad thai delivered to your doorstep is as easy as a few taps on your phone, it’s not surprising that more people are turning to apps for their banking needs. Our survey found that 78% of Americans say they conduct all of their banking online or through a mobile app, including an eye-popping 87% of millennials. Paradoxically, respondents also indicated that facetime remains important, with nearly half saying that speaking with a bank representative in person is their preferred mode of communication.

How different generations bank

Different generations have different preferences on everything from fashion to food. Their preferred mode of banking varies, too. Unsurprisingly, younger generations — who’ve grown up with technology at the center of their lives — are more likely to use a digital bank for their banking needs.

The survey found 21% of Gen Zers and 18% of millennials have their primary account at an online bank, compared to just 8% of baby boomers. Still, about 51% of Gen Zers and 59% of millennials have their primary accounts at a traditional bank — compared to more than 73% of baby boomers.

Younger generations were also much more likely than older ones to say that they do all of their banking online or via an app — 87% of millennials, compared to 67% of baby boomers.

Digital banking on the rise

As both fintechs and conventional banks invest more in their digital offerings, consumers have fewer reasons to visit a physical bank branch. JP Morgan Chase, for example, offers digital banking services like the ability to directly deposit checks straight from your phone to your accounts, and the option to check your balance and transaction history via text message.

The advantages of online-only banks further erode the draw of brick-and-mortar branches. Digital-only operations like Ally Bank and Chime offer very attractive APYs with no monthly fees, as they are saving money on overhead costs.

Cash management accounts from fintech companies can provide compelling alternatives to traditional bank accounts. For example, SoFi Money holds each customer’s cash in accounts at multiple partner banks. This arrangement means the partner banks provide a combined $1.5 million in FDIC insurance for each SoFi Money customer’s balance.

Other innovative features include Chime’s SpotMe feature, which grants its customers up to $100 if they overdraft their account, and Simple’s built-in budgeting tools, which seamlessly tell you how much money is safe to spend while taking into account your future goals and expenses.

Why use a physical bank branch?

Despite all the bells and whistles made possible by technology, physical bank branches do offer something an app can’t replace: in-person assistance. The value of physical, human contact shouldn’t be underestimated.

Case in point: In October 2019, Chime experienced a service outage, leaving millions of its customers without access to their accounts. With no physical branches, Chime’s customers were cut off from their money.

Our findings underscore the importance of having the option to waltz into a bank and ask for assistance, if need be: Among survey respondents, the number one preferred way to communicate with their bank was in person, beating phone contact and online chat.

Methodology

MagnifyMoney by LendingTree commissioned Qualtrics to conduct an online survey of 936 Americans with a bank account. The survey was fielded September 11-13, 2019. In the survey, generations are defined as:

  • Millennials are ages 22-38
  • Generation Xers are ages 39-53
  • Baby boomers are ages 54-73

Members of the Silent Generation (ages 74 and older) were also surveyed, and their responses are included within the total percentages among all respondents. However, their responses are excluded from the charts and age breakdowns due to the smaller population size among our survey sample.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Sarah Berger
Sarah Berger |

Sarah Berger is a writer at MagnifyMoney. You can email Sarah here

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How to Catch Up on Retirement Savings in Your 50s

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Data is increasingly showing that many Americans, even those in their 50s, have saved little for their retirement.

According to research by the nonprofit Economic Policy Institute, among households headed by adults ages 50 to 55, the median retirement savings is only $8,000, according to the Economic Policy Institute.

Lack of retirement funds is all the more concerning as today’s adults are expected to live much longer. In 1940, the life expectancy of a 65 year old was almost 14 years. Today it is just over 20 years.

Supplemental income like Social Security may not be enough to cover anything beyond basic needs, especially if retirees need extensive health care as they age. The average monthly Social Security benefit is $1,369, for an annual haul of $16,428 — that’s peanuts compared with the $46,000 that the average 65 year old spends in a given year.

For 50-somethings who are swiftly approaching retirement but feel as if they haven’t yet saved enough, it can be overwhelming. The good news is that you still have some time to catch up.

Here are seven ways to boost your savings and cut back on expenses.

Use a retirement calculator to set savings goals

Even though it’s late in the game, it’s important to get an idea of how much you need to save in order to have the type of retirement that you envision.

Organizations from the American Association of Retired Persons to insurance company Voya sponsor retirement calculators, which can project your individual financial goals and show you what it will take to reach those goals, even when you are late to the process. David Skid, executive director and financial adviser of Vantage Wealth Management at Morgan Stanley in Atlanta, suggests using a variety of retirement calculators, and comparing to make sure you get consistent results.

Retirement calculators will ask you to input several pieces of data, including your age, annual salary, how much you have saved for retirement so far and any pension you expect to receive, as well as this data for a spouse.

Retirement calculators will also often ask about your spending plans during retirement. For example, if you plan to travel or spend more on hobbies or dining out, calculators will take this factor into account when projecting how much you should save.

Take advantage of catch-up contributions

One good thing about turning 50 is an additional savings opportunity for your 401(k) and IRA accounts.

For eligible workers under the age of 50, the maximum contribution limit to a 401(k) is $19,500 in 2020, up from $19,000 in 2019, and to an IRA is $6,000.

But catch-up contributions allow eligible workers 50 and over to save more, which are called “catch-up contributions”. This boosts those total contribution limits to $26,000 and $7,000, respectively.

“The government gives the ability to turbocharge or jump-start [retirement savings] for investors that are getting a later start,” Skid said.

Don’t use your 401(k) like a piggy bank

It might be tempting when facing large costs such as college tuition to dip into your 401(k), but it’s best to not touch the account. All 401(k) withdrawals are subject to your ordinary income tax rate, and it’s likely you will pay more to take out money now rather than in your retirement years because you currently are earning more and therefore placed in a higher tax bracket.

Also, 401(k) accounts only allow for one loan at a time and loans must be paid back in five years, meaning you would have to take out all of the college tuition you would need in one withdrawal and pay back four years’ worth of costs in only five years.

If your child is vying to go to an expensive school and you’re tempted to use your nest egg to fund their way, think of this before you dip: College students have access to low-cost, flexible federal student loans and decades ahead of them to repay their debt. No one is going to issue a 50-something a low-rate loan to fund their retirement.

To save your child from the financial burden of paying for your retirement later in life, you might need to have a different conversation about paying for college on their own or taking out student loans. And it’s not only for your benefit — it’s for theirs, too.

“If we don’t save for our own retirement, then when we become older, we are going to have to be reliant on somebody else to financially support us when we are no longer able to work or face potential health challenges,” Skid said.

Enroll in employer match programs

When you are saving with a 401(k), some employers will match a percentage of the contribution you make to your account.

For example, your employer could match your contributions 100% up to 6% of your income. This means if you earn $100,000 and you place 6% into your 401(k), or $6,000, and your employer will add $6,000. If you add 8% of your income, or $8,000, your employer would still match you at 6%.

Not every employer offers a match and even when they do, the match they offer can be different. It is important for you to ask your company’s HR or similar representative to find out if this opportunity exists and how to take advantage of it.

If you haven’t taken advantage of this program or if your employer is just starting to implement matches, it’s worth your time to investigate. Employer matches are like free money to add to your retirement savings account.

“It’s important for all of us to make sure in our jobs what sort of match we might have available to us and contributing at least as much money as we can to get that free money from our employers,” said Skid, who also is a chartered financial analyst (CFA) and certified financial planner (CFP).

Also, if your employer’s 401(k) plans offer financial advice, take up the offer. A 2014 study by Financial Engines and Aon Hewitt found that 401(k) participants who received professional investment help in the form of managed accounts, target-date funds or online advice, earned higher median annual returns than others who invested on their own.

The study found that if two employees both invested $10,000 at age 45, one with advice and one without, the one who received advice could have 79% more wealth at age 65 than the employee without advice.

Add more income streams

Accelerate your savings by adding to your workload during the last few years until you retire or delaying your retirement if you are still healthy and able.

Add a part-time job or pick up an extra project at work to increase your monthly cash flow, some of which can be saved for retirement. Likewise, if you continue to work past 62, you can keep employer benefits, such as health insurance, and increase your time to add money to employer-sponsored retirement plans.

“If you are starting savings later in life, you might have to have a paradigm shift of when your retirement is going to start,” Skid said.

Automate your savings

Set your checking account to put aside money once a month into your investment account, instead of relying on yourself to manually do it, Skid says. You will be less likely to forget or bend to other expenses. Consider it your own personal payroll deduction plan.

Typically, most financial advisers suggest putting aside 10% to 15% of your income into a retirement account each year throughout your life. At this rate, financial services company Fidelity estimates that you should have about six times your salary saved up if you started saving at age 25 and planned to retire at age 67.

However, if you have delayed savings, a 2014 report from the Center for Retirement Research at Boston College found that in your 50s, you might have to boost the percentage of your income going to your account to almost 29% to reach a savings amount that is enough to live off.

Pay off debt aggressively

If you have enough cash on hand, Skid said accelerating your mortgage payments or paying down other consumer debt is another good way to prepare for retirement if you are late in the savings game.

Speeding up your mortgage payments would ease the burden of debt from the mortgage during retirement, when you would have less income to pay off the mortgage.

Because cash is earning you less than your mortgage is costing you, paying off your mortgage with that money will help set you up for a less costly retirement.

The same goes for high-interest credit card debt. You should still sock away at least enough in your 401(k) to capture any employer match, but then throw everything you’ve got toward tackling high-interest credit debt. Conservatively, you might earn 7% a year in annual stock market returns, while credit card debt can easily carry interest rates of 16% or higher.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lindsey Conway
Lindsey Conway |

Lindsey Conway is a writer at MagnifyMoney. You can email Lindsey here