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Young, rich workers are fleeing New York and California—here's where they're going

August 27, 2023

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Florida is the No. 1 state bringing in and keeping the young and rich

Florida might be known as a retirement destination, but it's attracting plenty of young — and wealthy — newcomers. Florida is the No. 1 state bringing in and keeping the young and rich, according to a recent analysis from SmartAsset, which ranked states based on net migration.

The financial site determined the states netting the most young professionals, ages 26 to 35, who earn at least $200,000 per year in adjusted gross income, based on the most recent publicly available IRS numbers from 2021.

That year, some 3,391 high-earning young people moved to Florida; 1,216 left, leaving the state with a net migration of 2,175 wealthy young people, as determined by SmartAsset.

In second place, Texas saw the second-largest wave of young and wealthy newcomers with 4,048 moving in over the course of a year. (California boasts the biggest influx in the U.S. with nearly 5,000 new taxpayers of this demographic.) However, the Lone Star State also saw a large outflow of young wealthy people leaving (over 2,000 taxpayers), resulting in a net migration of 1,909.

And in third-place New Jersey, while wealthy people of all ages generally left the state at a high rate, it also netted 1,048 new rich young professionals in the same year. "This was the most dramatic reversal from the aggregate trends," Jaclyn DeJohn, SmartAsset's managing editor of economic analysis, wrote in the report.

States like Florida and Texas stand out to young wealthy people for a number of reasons, DeJohn tells CNBC Make It. They're home to newer tech hot spots like Austin and Miami, where opportunities can "attract those with niche or exceptional skills and experience looking to further develop their careers." Warm weather and zero income tax in both states are a selling point, too.

New Jersey, meanwhile, "offers close proximity to the career, social and entertainment opportunities of New York City, with the potential to save money while living a suburban lifestyle." That can be "a best-of-both-worlds type situation" for young people, DeJohn says, whereas older residents may already be retired or have less to gain from the job market.

Plus, New Jersey's "high real estate taxes contribute heavily to a very competitive public school system, which also is of much more use to young families versus retirees," she adds.

New York and California have the highest count of young high earners of any state "by a wide margin," DeJohn says, and also boast some of the highest influxes of young rich people in the U.S.

Almost 4,000 young wealthy taxpayers moved to New York in 2021, while nearly 5,000 called California their new home; however, both states lost more than 9,000 people of the same demographic, putting them at the bottom of the list for the young and the rich.

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