This is where young, wealthy Americans are moving.

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California and New York recorded the highest numbers of high-income millennials leaving the country.

(Wealth of Geeks) – After the COVID-19 pandemic, all American cities have seen significant increases in the cost of living. To make matters worse, with the possibility of a recession on the horizon, many Americans are feeling very anxious about their financial security.

Surprisingly, many young and wealthy Americans also struggle with this anxiety. Rising costs are making them more cautious about their spending. Many young, affluent Americans are moving to cities with lower costs of living to make ends meet and protect their ability to save.

Financial advisory firm SmartAsset recently released a report ranking American states based on net immigration. The report looked specifically at Americans ages 25 to 36 who earned more than $200,000, based on 2021 Internal Revenue Service numbers.

According to the report, Florida, Texas, and New Jersey are the most preferred destinations for these wealthy millennials. Most newcomers moved to metropolitan areas such as Jersey City, Miami, and Austin. Other popular destinations in this group include Colorado, Connecticut, and North Carolina.

Key takeaways from the survey include:

— Florida and Texas had the largest inflows of high-income people, while California and New York had the largest outflows. After accounting for both inflows and outflows, Florida and Texas gained a total of 2.175 and 1,909 high-income residents, respectively.

— Even after immigration, New York and California are home to the largest numbers of young, high-income people in America.

–Generally, 2,617 high-income taxpayers left New Jersey in 2021. But that same year, 1,048 new wealthy young professionals flocked to New Jersey. A similar trend was observed in Connecticut.

–Of all US states, California has the highest number of young wealthy people. In this state, more than 13% of the total population with annual incomes of $200,000 or more are in the 26-35 age group.

why are they moving?

Many experts believe there are several reasons why Florida and Texas are top choices among young and wealthy people planning to relocate. With zero income taxes, these states are ideal for younger earners who want to focus on saving more and growing their retirement savings. Additionally, Florida's unemployment rate is 2.7%, well below the national average of 3.5%.

When it comes to Texas, Austin and Miami are rapidly emerging as technology hotspots, attracting young professionals with outstanding niche skills looking to develop their careers. The average cost of living in Texas was just over $45,000, $8,000 less than California and New York, according to a 2022 study by the Department of Commerce's Bureau of Economic Analysis.

The warm climate of Florida and Texas is also a selling point.

New Jersey, on the other hand, is a great option to live a suburban lifestyle and save money while enjoying proximity to New York and social, work, and entertainment opportunities. The state's graduated income tax structure means that your tax rate also increases as you earn more. However, many young, wealthy New Yorkers decided to move across the Hudson River due to the cost of housing. According to Zillow, his median monthly rent in Jersey City in late August was $2,700, compared to his $3,750 in New York City. Additionally, many young families prefer to live in New Jersey because of our competitive public school system.

Pursuing financial independence

Financial independence is undoubtedly a top priority for young, affluent Americans moving to other states. Interestingly, today's young people have a completely different outlook on their future than past generations. A high percentage of this generation has interests other than working for others. For many of them, looking at their own business is the overriding goal.

According to a recent study conducted by Wakefield Research, 60% of today's teens would like to start a business someday rather than work in a traditional job. For around 40% of respondents, this ambition was heavily influenced by celebrities and social media influencers.

Final goal: Achieving “FatFIRE”

“FatFIRE” is one of the most effective ways to achieve lifelong financial independence. Unlike traditional FIRE (Financial Independence, Early Retirement), which requires living stingy and following a frugal lifestyle, FatFIRE involves enjoying a more luxurious lifestyle despite retiring early. The purpose is By adopting this unique approach to early retirement, many people maintain or even improve their pre-retirement lifestyles.

Traditional FIRE followers seek to build sufficient assets for the future by minimizing expenses and maximizing savings. FatFIRE, on the other hand, aims to build enough assets to match or exceed your pre-retirement lifestyle. Those who practice traditional girlfriend FIRE may find their retirement at risk if unexpected expenses arise. However, FatFIRE believers may remain retired because of their asset cushion.

It's important to remember that pursuing FatFIRE requires you to save significantly more outside of your normal living expenses. Naturally, this option is suitable only for high-income earners and business owners. Recent trends suggest that younger, more affluent Americans are moving to lower-cost states and are well-positioned to embrace this lifestyle movement.

This article was created by Media Decision and distributed by Wealth of Geeks.