New York and California have long been attractive places for young workers striking out on their own. But that may be changing.
A survey conducted by SmartAsset tracked the movement of so-called “rich young professionals,” which it described as anyone under 35 earning an adjusted gross income of at least $100,000.
SmartAsset determined the inflow and outflow of rich young professionals in all 50 states and the District of Columbia by using Internal Revenue Service data to compare tax returns from 2019 and 2020.
It seems young professionals are most eager to leave New York. With a net outflow of 15,788, this state had the highest number of individuals leaving by a significant margin. With a net outflow of 7,960, California also appears to be losing allure for rich young professionals.
So, where are young people going? These are the top seven states wealthy millennials are flocking to, according to SmartAsset:
1. Texas
Total inflow: 15,024
Total outflow: 11,200
Net inflow: 3,823
2. Florida
Total inflow: 10,258
Total outflow: 6,847
Net inflow: 3,411
3. Washington
Total inflow: 9,882
Total outflow: 7,129
Net inflow: 2,753
4. Colorado
Total inflow: 7,306
Total outflow: 4,665
Net inflow: 2,641
5. New Jersey
Total inflow: 11,015
Total outflow: 8,556
Net inflow: 2,459
6. North Carolina
Total inflow: 6,929
Total outflow: 4,881
Net inflow: 2,048
7. Arizona
Total inflow: 4,231
Total outflow: 2,794
Net inflow: 1,437
The top two states, Texas and Florida, are known for their lack of income tax, which may make them appealing to young professionals. “They also have a reputation for affordability,” Susannah Snider, a certified financial planner and managing editor of financial education at SmartAsset, tells CNBC Make It.
However, it’s important to remember that “housing costs and other expenses will vary within a particular state,” Snider says.
With an inflow of 2,800 wealthy young millennials, Washingon also appears to be a place of interest. That makes sense: Washington was previously ranked the most affordable state for millennials by WalletHub.
In contrast, California and New York both have a reputation for being expensive, Snider says.
The rise of remote work may also play a role in why affluent young people are fleeing coastal hubs. “While our study doesn’t quantify the role the Covid-19 pandemic had on the migration patterns of rich young professionals, I think it’s worth noting its potential effect,” Snider says.
“As offices closed in 2020 and companies switched to remote work, young professionals may have had more flexibility in choosing where to live and could move based on factors unrelated to workplace proximity.”
Keep reading on CNBC.
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