For the young and upwardly mobile, getting out of town is not just a trend. Their migration is a huge shift from previous decades when young people flocked to cities and suburban areas. For people aged 26 to 35, only 2% of tax returns filed show an income of $200,000 or higher, according to Stacker and SmartAsset. That number might seem small, but these folks actually make up 16% of the income for this age group, meaning that taxes collected on them can greatly impact local economies and government revenues.
To better understand where the young and wealthy are moving, SmartAsset looked at newly-released IRS migration data to reveal the places that are being left the most and where those folks are moving in droves. What they found is beyond surprising. Let’s dig in!
Key Findings
More Young and Rich Folks Are Calling Florida and Texas Home
Florida and Texas gain the most young high earners, while New York and California lose the most.
Florida added a total of 2,175 high earners aged 26 to 35 (after accounting for both inflows and outflows), while Texas acquired a net of 1,909. Despite the losses, New York (-5,062) and California (-4,495) still have the highest count of young high earners of any state by a vast margin.
It’s Complicated in New Jersey
Despite an overall exodus of high earners from New Jersey, the state is proving to be a magnet for affluent young professionals. In 2021, the state experienced a loss of 2,617 tax filers with high income across all age groups. In contrast, it attracted 1,048 wealthy young professionals within the same period, indicating a significant deviation from the broader trend. A similar, albeit less pronounced, pattern was observed in Connecticut.
Washington Has a Lot of Young Earners
Washington boasts the youngest population of high earners. When compared to either the entire wealthy demographic or the total population, the state has an unusually high percentage of young affluent individuals. Over 13% of those earning a minimum of $200,000 in Washington fall within the 26 to 35 age bracket. California follows with the second largest population in this category, making up 10%. Other states like New York, Massachusetts, and New Jersey also have notably high proportions of young individuals with high earnings.
Washington, DC Pays Well
Even with some losses, Washington, DC, continues to be a hub for young, high earners. Despite losing close to 700 tax filers in the age range of 26 to 35 with high incomes, DC’s relative population in this demographic surpasses any state. Over 16% of individuals earning more than $200,000 belong to this age group.
Take a Closer Look:
Where the Young and Rich Moved
Florida
Florida experienced a net increase of 2,175 tax filers earning high incomes within the age group of 26 to 35. The state welcomed 3,391 new additions, while 1,216 either relocated or dropped out of the high-income bracket. The most recent data shows that there are 23,537 tax returns from this demographic, with earnings exceeding $200,000. Notably, Florida is among the nine states that do not levy an income tax.
Texas
Texas witnessed a greater influx of affluent young professionals compared to Florida, with 4,048 new high-earning tax filers falling within the specified age category. However, the state also experienced a higher outflow of 2,139 filers, resulting in a net migration of 1,909 into Texas. Out of nearly 700,000 tax returns reporting income above $200,000 in Texas, 7% belong to individuals aged between 26 and 35. Like Florida, Texas doesn’t impose a state-level income tax.
New Jersey
New Jersey witnessed the most significant shift in migration patterns across all demographics. Although high-income earners typically moved away, the demographic of high earners skewed more towards the 26 to 35 age group. The state saw an influx of 3,311 new tax filers in this age bracket earning less than $200,000, while 2,263 departed.
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Colorado
Similar to Texas and New Jersey, the 26 to 35 age group accounts for a notable proportion (7%) of individuals earning over $200,000. The state experienced a net increase of 754 high-income tax filers within this age range, with 1,681 individuals moving into the state and 927 moving out.
North Carolina
In North Carolina, tax returns filed by affluent individuals aged between 26 to 35 amounted to a total of 13,621. This age group comprises 5.9% of all individuals in the state with earnings exceeding $200,000. Overall, when considering all age brackets, North Carolina ranked third in terms of net migration of high-income earners.
Connecticut
Connecticut saw a higher growth in young individuals earning above $200,000 compared to all other age groups. Out of the 8,274 tax filers within this demographic, the state had a net gain of 660 after accounting for 1,404 individuals moving in and 744 moving out.
Washington
Washington State, which doesn’t levy a state income tax, boasts the greatest percentage of young high-income earners within the bracket of those earning $200,000 or more. The state recorded a net increase of 464 individuals in this group, attributable to an influx of 2,660 people and an exodus of 2,196.
Tennessee
Tennessee saw a total of 7,345 tax filings from high-income individuals aged between 26 and 35. The state experienced a net increase of 441 individuals in this demographic, resulting from an inflow of 868 high earners and an outflow of 427. Again, Tennessee is one of the few states that does not impose a state income tax.
Arizona
Arizona experienced a net increase of 321 tax filers aged between 26 and 35 earning over $200,000. This was the result of 832 individuals in this income bracket moving into the state while 511 moved out.
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South Carolina
South Carolina completes the top 10 list, with a net addition of 318 young high-earners, bringing the total to 95,584 in the state. This increase is due to 601 new high-income tax filings, offset by 283 departures from the state.
In conclusion, the trend of young, affluent individuals migrating to unexpected locales is reshaping demographic and economic landscapes across the nation. States like Tennessee, Arizona, and South Carolina have emerged as surprising hotspots for this group, offering unique attractions beyond traditional wealth hubs. As we continue to navigate a world increasingly influenced by remote work and shifting lifestyle priorities, it will be fascinating to observe how these migration patterns evolve. The young and rich are indeed on the move, and they’re charting a fascinating course for the future.
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