Quick Hit: 

A recent analysis reveals that high-earning millennials are leaving New York and California in large numbers, favoring states like Florida and Texas with lower costs of living and taxes.

Key Details:  

• California lost 9,181 high-earning millennial households, while New York lost 4,251 between 2021-2022.  
• Florida saw a net gain of 6,188 wealthy millennials, and Texas gained 5,151 during the same period.  
• The demographic shift is driven by lower living costs, taxes, and more economic freedom in red states.  

Diving Deeper: 

A growing trend of wealthy millennials leaving liberal-leaning states like California and New York has been revealed in a recent report by SmartAsset. The analysis, which examined tax return data from 2021 and 2022, shows that millennials earning $200,000 or more annually are relocating to southern, more conservative states like Florida and Texas. This shift is seen as a significant realignment of economic power and demographics in the U.S.

California saw the largest outflow, with a net loss of 9,181 households in this income bracket. Although 14,139 high-earning millennials moved into the state, 23,320 left during the same period. New York followed closely, losing 4,251 wealthy millennial households on balance, with 15,591 leaving compared to 11,340 moving in.

The exodus from these blue states comes as living costs continue to rise, even for high-income earners. New York and California rank among the most expensive states, with high taxes and soaring housing costs. In contrast, states like Florida and Texas offer more favorable financial conditions, including lower taxes and reduced living expenses, drawing in these high-earning Gen Yers.

Florida, in particular, saw a net gain of 6,188 wealthy millennials, while Texas gained 5,151. North Carolina also benefited, with an increase of 1,970. The demographic trend indicates that this group is seeking regions where their money stretches further, especially in terms of housing and taxes.

According to the report, wealthy millennials have significant disposable income and economic freedom, allowing them to make such moves. Their relocations have a notable impact on local economies, bringing with them purchasing power that can drive growth and change the economic landscape of their new states.

With this migration, red states stand to benefit from the influx of younger, high-earning residents, while blue states continue to grapple with the loss of this valuable demographic.