High-income workers across the U.S. have migrated to Miami to take advantage of the city’s generous tax policies and moderate cost of living. But depending on what parts of the country you’re from, moving to the Magic City may not make financial sense.
That’s the main finding of a new study from financial technology company SmartAsset. According to the study, workers in New York City with $650,000 in annual income could save nearly $200,000 a year by moving to Miami, where the cost of living is roughly 115% lower than in the Big Apple.
Equally well-off San Franciscans would experience a 60% drop in cost of living in Miami and save slightly over $150,000 a year. By contrast, Chicagoans at that salary level would find the cost of living in Miami to be only 6% lower and would save just $10,500 by heading south.
SmartAsset used federal, state and local tax, and cost of living data to calculate how much single tax filers from New York, San Francisco and Chicago earning between $150,000 and $650,000 a year could save by settling in Miami. Researchers also factored in housing expenses using data from each city’s downtown area.
The study shows savings increased with workers income, with higher earners getting the most bang for their buck. Still, people making $150,000 could hold onto more of their paycheck by settling down in Miami, with savings ranging from roughly $1,900 to $48,000, depending on what city they are moving from.
Savings across income levels were consistently higher for New York residents than for residents of other cities, the study shows. That’s because New York’s cost of living is the highest of the cities SmartAsset analyzed, at 137% above the national average. Miami’s cost of living is 23% above the national average.
Not just snow birds
With the cost of living in New York so high, it should come as no surprise that many of the city’s residents are eyeing greener pastures.
According to search activity data from real estate listing website Realtor.com, many prospective homebuyers and renters living in New York are searching for properties in Florida. Seven of the 10 most-searched counties by New York-based users on the site were in Florida, and all were outside of New York state.
New Yorkers are also responsible for 23% of searches for housing in Miami-Dade county, according to Realtor.com data.