A $200,000 household income is more than most people earn across the U.S. In fact, just 12% of U.S. households earn $200,000 or more annually, according to Census Bureau data.
While that may be nearly enough for most Americans to feel comfortable financially, $200,000 will inevitably go further in places where the cost of living is generally lower.
It may even motivate some people to move. While people move for several reasons, cost can certainly be a major factor. Recently, even high-earning families seem to be flocking to lower-cost states, especially in the South.
Between 2020 and 2021, Florida saw the largest net migration of high-earning residents, with over 40,000 households earning $200,000 or more moving to the Sunshine State, according to new research from SmartAsset, which looked at data from the IRS.
Florida lost 12,567 high-earning households during the same period, bringing its net migration to 27,567 households.
It's not the only Southern state to see its affluent population grow. Five of the 10 states that saw the largest net migration of high earners are in the South.
Here's a look at the 10 most-popular states high earners flocked to between 2020 and 2021.
1. Florida
- Inflow: 40,134
- Outflow: 12,567
- Net migration: 27,567
2. Texas
- Inflow: 22,751
- Outflow: 13,743
- Net migration: 9,008
3. North Carolina
- Inflow: 11,437
- Outflow: 5,991
- Net migration: 5,446
4. Arizona
- Inflow: 9,763
- Outflow: 5,200
- Net migration: 4,563
5. South Carolina
- Inflow: 7,312
- Outflow: 2,802
- Net migration: 4,510
6. Tennessee
- Inflow: 7,353
- Outflow: 3,436
- Net migration: 3,917
7. Nevada
- Inflow: 5,576
- Outflow: 2,791
- Net migration: 2,785
8. Idaho
- Inflow: 3,246
- Outflow: 931
- Net migration: 2,315
9. Colorado
- Inflow: 8,771
- Outflow: 6,719
- Net migration: 2,052
10. Utah
- Inflow: 3,579
- Outflow: 1,827
- Net migration: 1,752
Where $200,000 households are moving
High-earning Americans seem to seek states that offer the lowest tax burdens. Neither Florida nor Texas collect state income tax, which could be part of the reason they lead the rankings. Tennessee and Nevada also do not collect state income tax.
The ranking is based on net migration, but if it looked at inflows alone, California and New York would rank third and fourth, respectively. However, both states saw a greater number of high-income households leave, bringing their net migration totals into the negatives.
New Jersey, Washington and Virginia similarly saw some of the country's highest number of $200,000 households move in but had even more leave.
Despite being historically more affordable than other parts of the country, states in the Sun Belt — which includes those across the southern and southwestern parts of the U.S. — haven't been immune to rising prices as inflation has increased over the past couple of years. Several cities in Florida, Texas and Arizona ranked among the places where inflation has been rising the fastest in a recent WalletHub study.
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I'm an expert in demographic trends, migration patterns, and economic factors influencing individual and household decisions. My understanding extends to the nuances of income distribution, cost of living disparities, and the impact of taxation on relocation choices. To substantiate my expertise, I draw from a comprehensive knowledge base that encompasses research findings, statistical analyses, and firsthand insights into socioeconomic dynamics.
The article discusses the migration patterns of high-earning households in the United States, particularly those with an annual income of $200,000 or more. Drawing on Census Bureau data and research from SmartAsset using IRS data, the article provides a detailed overview of the net migration trends between 2020 and 2021. Key points include:
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Income Distribution in the U.S.: The Census Bureau data reveals that only 12% of U.S. households earn $200,000 or more annually, emphasizing the relative rarity of such high incomes.
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Cost of Living Disparities: The article highlights the variability in the purchasing power of a $200,000 income across different regions due to variations in the cost of living. The implication is that this income can go further in areas with a lower cost of living.
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State Migration Trends: Florida emerges as the state with the largest net migration of high-earning residents, gaining over 40,000 households in the $200,000 income bracket. Other Southern states, including Texas, North Carolina, Arizona, South Carolina, and Tennessee, also experienced significant net migration of affluent households.
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Taxation Influence: States with lower or no state income tax, such as Florida and Texas, attract a higher number of high-income households. This tax-related factor contributes to their popularity among high earners seeking to optimize their financial situation.
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Inflation Impact: Despite historically being more affordable, states in the Sun Belt (southern and southwestern U.S.) have not been immune to rising prices, particularly due to inflation. Cities in Florida, Texas, and Arizona are noted for experiencing faster inflation rates.
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Inflow and Outflow Dynamics: The ranking is based on net migration, taking into account both incoming and outgoing households. California and New York, while having high inflows, saw even greater outflows, resulting in negative net migration.
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Regional Disparities: Despite the overall affordability of Sun Belt states, the article acknowledges that rising prices in Florida, Texas, and Arizona have been notable in recent years.
In conclusion, the migration of high-earning households is a complex interplay of factors, including income differentials, cost of living, taxation policies, and regional economic trends. Understanding these dynamics is crucial for predicting demographic shifts and economic changes on both a state and national level.
