According to a recent report by SmartAsset, a financial advisory firm, many young and wealthy Americans are moving to states with lower costs of living and no income tax, such as Florida, Texas, and New Jersey. The report analyzed the IRS migration data from the 2021 tax year and focused on Americans aged 26 to 35 who earned more than $200,000 per year.
Why are they moving?
One of the main reasons why these high-earning millennials are relocating is to save more money and boost their retirement accounts. Florida and Texas, which do not charge income tax, are ideal destinations for this purpose. Moreover, these states have lower unemployment rates than the national average and offer attractive opportunities for career development, especially in the tech sector.
Another reason why young and rich Americans are moving is to enjoy a better quality of life. Florida, Texas, and New Jersey have warmer climates, diverse cultures, and vibrant entertainment options. These states also have some of the best beaches, parks, and natural attractions in the country.
Where are they moving?
The report ranked the states based on their net migration of young high earners, which is the difference between the number of people who moved in and the number of people who moved out. The top three states were Florida, Texas, and New Jersey, with net gains of 2,175; 1,909; and 1,048 respectively.
Most of the newcomers relocated to large metro areas such as Miami, Austin, and Jersey City. Some other popular destinations among this group included Denver, Colorado; Stamford, Connecticut; and Raleigh, North Carolina.
Where are they moving from?
The report also revealed the states that lost the most young high earners in 2021. The bottom three states were California, New York, and Illinois, with net losses of 5,066; 5,005; and 2,617 respectively.
These states have some of the highest costs of living and income tax rates in the country. Many young professionals who lived in these states felt financially stressed and dissatisfied with their lifestyles. They also faced challenges such as traffic congestion, pollution, and crime.
However, despite the outflows, California and New York still have the highest number of young high earners in the country. These states are home to some of the most prestigious universities, companies, and industries in the world. They also have a strong influence on culture, politics, and innovation.
What are the implications?
The migration patterns of young and rich Americans have significant implications for the economy, society, and politics of the country. The states that gained more high earners will benefit from increased tax revenues, consumer spending, and business activity. They will also attract more talent, investment, and innovation.
On the other hand, the states that lost more high earners will face reduced tax revenues, consumer spending, and business activity. They will also struggle to retain their talent, investment, and innovation. They may have to adjust their policies and incentives to attract and keep more young professionals.
The migration patterns may also affect the electoral map and the balance of power in Congress. The states that gained more high earners may see an increase in their population and their representation in the House of Representatives. They may also shift their political preferences and leanings over time.
The report by SmartAsset provides a snapshot of where young and rich Americans are moving in 2023. It shows that many of them are seeking lower costs of living, no income tax, better quality of life, and more opportunities in states such as Florida, Texas, and New Jersey. These states are becoming more attractive and competitive for this demographic group.
