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Paycheck to paycheck

Sarah’s conclusion dripped with sarcasm as well: “Why do I need to move out? I could just live paycheck to paycheck for life.”

Her message resonated with many. Her video has amassed more than 1.2 million views, 66,000 likes, and 1,172 comments.

The audience in the comment section pointed out the harsh realities of living in New York City.

“Managing to live paycheck to paycheck with those costs is a flex, I'm not gonna lie,” read one of the top comments.

Indeed, it requires substantial financial resources to afford such expenses.

A recent study from SmartAsset found that a single adult needs to earn $66.62 per hour to live comfortably in New York City, which equates to an annual salary of $138,570. It defined a comfortable lifestyle using the 50/30/20 budget rule: spending 50% of income on necessities like housing and groceries, 30% on discretionary spending and 20% on paying off debt, saving and investing.

The figures for a single person are already staggering, but they become even more daunting for families. SmartAsset found that to raise two children comfortably in New York City, two adults need to earn a combined $318,406 annually.

To put this into perspective, the median household income in the U.S. was $74,580 in 2022, according to the U.S. Census Bureau.

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High earners on the move

The exorbitant cost of living in New York City highlights the significant financial burdens borne by its residents. The state of New York also consistently ranks as one of the most expensive regions to live in, and even affluent individuals are reportedly choosing to relocate.

A 2023 report from SmartAsset examined the inflow and outflow of tax filers making at least $200,000 in each state. It found that in 2021, New York experienced an outflow of 31,485 high earning tax filers. This was the second-largest outflow of high earners in the country, second only to California, which saw 45,578 such filers leave.

Although New York welcomed 11,690 high-earning tax filers in 2021, the substantial outflow resulted in a net decline of 19,795 high earners.

In contrast, Florida and Texas emerged as the top destinations for high earners relocating, experiencing net migrations of 27,567 and 9,008 such filers in 2021, respectively.

According to a Florida Chamber of Commerce 2023 report, new residents infused a total of $39.2 billion of net income into the Sunshine State over just one year. Of this net income migration amount, $9.8 billion came from New York alone, more than any other state.

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Jing Pan Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

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