Here's why people will save up to $200,000 if they move to Miami

How much people with 6-figure salaries in New York, San Francisco, and Chicago can save by shifting to Miami?
An undated image shows a woman on an airport. — Pixabay
An undated image shows a woman on an airport. — Pixabay

People are constantly looking for options to save money for their future and if you live in New York — which is considered one of the most expensive cities — you can save approximately $200,000 per annum if you move to Miami.

Lower taxes and cheaper cost of living can help people — who earn around $650,000 per year  —  can help people save money.

According to a new study from financial information provider SmartAsset, for people with a $650,000 salary who leave San Francisco for Miami, the savings is estimated at more than $150,000.

Meanwhile, for people living in Chicago, the savings was about $10,500, mostly because the cost of living in the Windy City is cheaper, and that offsets the tax benefits in Florida.

Florida has long been a destination for retirees from the Northeast, who flocked south for better weather and lower taxes. But the exodus from high-cost states including New York and California to the Sunshine State accelerated during the pandemic. That’s helped pushed housing prices higher, especially in Miami.

The real estate surge has cut into the economic benefits of moving to Florida, at least a bit, and billionaire tech investor Peter Thiel recently said relocating from Silicon Valley to Miami didn’t make sense.

It should be noted that while conducting the study the researchers looked at how much people with six-figure salaries in New York, San Francisco, and Chicago can save on taxes and other costs if they decamp to the South Florida city.

SmartAsset looked at single tax filers earning between $150,000 and $650,000 annually in New York, San Francisco, and Chicago, and they took into account federal, state, and local tax data. They used downtown areas of each city to account for housing expenses and cost of living.

The study further found that the savings decline along with income, but people making $200,000 a year in San Francisco and New York would still see significant benefits if they decide to move to Miami.

According to the report, Manhattan and Miami have the most drastic differences in the cost of living. Costs are 138% higher than the US average in Manhattan, but only 23% higher than the average in Miami.

That difference is heavily influenced by Florida’s lack of state income taxes. While people making $650,000 a year face an effective tax rate of 45% in New York, that drops to 35% in Miami.

The effective tax rate for people in San Francisco making $650,000 a year is 46%, with the city costing 83% more than the US average.

In Chicago, meanwhile, the cost of living is just 17% more than the national average and the effective tax rate on people making $650,000 a year is about 40%, according to the study.