Rich Gen Z-ers are leaving Washington faster than all but one state, a new study finds

It’s not just millennials. Wealthy Gen Z-ers are leaving Washington at one of the fastest rates in the country, according to a recent study from financial insights website SmartAsset, based on IRS data.

While Gen Z hasn’t had much time to build up wealth — the oldest members of the generation are just 27 — Washington has just over 2,500 Gen Z households that make more than $200,000 a year, accounting for 0.66% of all high-earners in the state. But between 2021 and 2022 alone, the state saw 354 of those leave. Approximately 276 high-earning Gen Z-ers moved in, meaning the state lost 78 more wealthy Gen Z households than it gained, SmartAsset determined.

Gen Z-ers are leaving Washington

That represented the second-highest drop off of any state, just behind Illinois, which saw 80 wealthy Gen Z households leave. Trailing Washington were Massachusetts, New Jersey and Pennsylvania. Here’s how the rest of the top ten stacked up.

1. Illinois

2. Washington

3. Massachusetts

4. New Jersey (tie)

5. Pennsylvania (tie)

6. Maryland

7. Connecticut

8. North Carolina

9. California

10. Michigan

States wealthy Gen Z-ers are moving to

Where are Gen Z-ers moving to, if not Washington? The study found that New York gained more wealthy Gen Z households than the rest of the top-ten combined. Here’s the full list of states that gained the most wealthy Gen Z households.

1. New York

2. Florida

3. Tennessee

4. Colorado

5. Texas

6. Arizona

7. Mississippi

8. Nevada

Several states saw no movement among wealthy Gen Z-ers. With a relatively low presence already, the lack of movement brought a three-way tie between nine states: Montana, South Dakota, North Dakota, Alaska, Wyoming, Vermont and West Virginia.

Gen Z vs. millennial moving patterns

SmartAsset did a similar study looking at wealthy millennials. Between the two generations, high-earning Gen Z-ers and millennials have some state-to-state migration patterns in common. Florida, Tennessee, Colorado, Texas, Arizona and Nevada are all popular moving destinations for both generations.

Conversely, they’re both leaving Illinois, California, Massachusetts, Pennsylvania, Michigan and our own Washington state en masse.

To determine the rankings, SmartAsset used the most recent IRS data, from the 2021 and 2022 tax years. Per IRS standard, a “high-earning household” makes at least $200,000 in adjusted income per year. Applicable tax returns for households under age 26 earning at least $200,000 were considered for the study. The inflow and outflow of such households in each state was examined, determining the individual rankings.

This story was originally published September 23, 2024 at 12:44 PM with the headline "Rich Gen Z-ers are leaving Washington faster than all but one state, a new study finds."