Americans who head South could find that their move saves them up to $200,000 a year in reduced taxes and lower cost of living.
Key Details
- Since the pandemic, Americans have been creeping southward in a slow-moving migration to less expensive areas.
- Warmer weather, lower taxes, and lower cost of living have driven more people to head South permanently.
- A person who makes $650,000 a year in New York can save up to $200,000 a year just by moving to Miami, Bloomberg reports.
- Six-figure earners who leave New York or San Francisco can save more than $100,000. Those who leave Chicago for Miami would only save around $10,500, according to financial information provider SmartAsset.
Why it’s news
The American population has started to shift South, a relatively new trend for the U.S. These moves are not only driven by warmer weather in the South but by the understanding that expenses are lower in Southern states than in Northern states. With SmartAsset’s analysis, residents can better understand how much they could save by making a move.
Savings are significant when six-figure income earners look to move from expensive areas like San Francisco or New York. The benefits are less noticeable when comparing numbers from Chicago. While the Windy City does not have the same tax benefits as Florida, it does have lower living costs, Bloomberg reports.
Here’s a look at how much high-income earners could save by moving from New York City to Miami:
Income Level
$650,000
$500,000
$350,000
$200,000
$150,000
Miami Savings
$195,076.06
$152,195.88
$108,449.31
$64,566.86
$48,695.75
While Florida has long been a destination for retirees looking for better weather and more favorable tax options, the pandemic accelerated a trend of younger, still-working residents moving to the Sunshine State. Remote gave this trend a boost. More employees could keep a job they liked while moving to a preferred state.
Though the tax benefits make Florida appealing, the influx of residents has driven housing costs higher, making deciding whether or not to move from North to South a little more complicated. High housing costs may offset any tax-saving benefits.
One of the most apparent benefits is the income tax rates. In Florida, residents do not have a state income tax. New York residents earning $650,000 yearly have a 45% tax rate. San Francisco residents making the same amount have a 46% tax rate along with a notoriously more expensive city, Bloomberg reports.
