Xavierarnau | E+ | Getty Images
Americans making a six figure income and trying to grow their money even more flock to Florida.
According to SmartAsset’s latest analysis, the Sunshine State has attracted the most high-income workers earning at least $200,000. And considering that the cost of living in Florida is typically lower than in pricier states, high earners could save hundreds of thousands of dollars by moving there, even in an expensive city like Miami.
According to a June SmartAsset study, someone living in Manhattan and earning $650,000 could save nearly $200,000 in living expenses and tax expenses if they moved to Miami and kept the same salary.
New York is one of the world most expensive cities. According to SmartAsset, Manhattan costs are about 137% higher than the US average, which is why jobs in NYC tend to be paid above the US average.
According to the latest available data from the Bureau of Labor Statistics, the cost of living in Miami is approximately 23% higher than the national average and the typical worker earns slightly less than the national average. On average, workers in the Miami-Fort Lauderdale-West Palm Beach area make about $28.36 an hour, which is just below the national average of $29.76, according to the agency’s most recent report.
Florida’s lack of a state income tax also means that high earners tend to be taxed less there compared to other metro areas in the state. According to SmartAsset, someone earning a six-figure sum and living in Miami is typically taxed between 27% and 35%, while someone with the same income level living in Manhattan is taxed at an effective tax rate of between 36% and 45% .
While San Francisco residents may not be able to save as much as New Yorkers, they could still benefit financially from a move to the Sunshine State. High-income earners living in San Francisco could save around 24% on their salary by moving to Miami, SmartAsset research shows.
You might find Miami’s tax regime more favorable. In San Francisco, someone making between $150,000 and $650,000 is typically taxed between 36% and 46%. That’s significantly more than the amount Miami taxes this level of income.
According to SmartAsset, high-income earners who move to Miami from Chicago would have the smallest savings but could potentially reduce their tax burden. Although the cost of living in Chicago is lower than in Miami, Chicagoans making between $150,000 and $650,000 are taxed at a higher rate of between 32% and 40% per SmartAsset.
That’s how much money someone earning between $150,000 and $650,000 can save by moving to Miami from San Francisco or Chicago, according to SmartAsset.
If you’re thinking about moving, don’t just do your research the cost of living, but also factors that may affect your potential quality of life, such as: B. the local culture and access to entertainment, food and medical services.
While the promise of a lower tax burden seems tempting, it’s important to remember that taxes help fund local infrastructure, public transport and other essential services. Make sure you consider the trade-offs.
DON’T MISS: Do you want to be smarter and more successful with your money, your work and your life? Sign up for our new newsletter!
Get CNBC’s for free Warren Buffett’s Guide to Investingwhich brings together the billionaire’s best advice for regular investors, rules of conduct and three key investing principles into one clear and simple guide.
CASH: Americans have nearly $1 trillion in credit card debt — here’s the breakdown by age
