Here Are America’s Best Destinations for Young Wealth Builders; Massachusetts Tops the List
The average income per state in the United States varies from state to state. The Census Bureau’s 2022 American Community Survey puts the median annual household income at $74,755 but the households in states with the lowest median incomes earn about $50,000 less than those with higher median incomes. New Jersey and Maryland had the highest median household incomes of all states, per the data. Between 2021 and 2022, five states—Alabama, Alaska, Delaware, Florida, and Utah—showed a notable increase in real median household income; 17 states showed a decline.
Wealthiest states and reasons behind their income
The U.S. Census Bureau calculates average household income by considering the total income of all people aged 15 or older living in a household. This includes a variety of factors such as wages, salaries, unemployment benefits, disability expenses, child support, rental income, personal services, etc. If you have to guess where the wealthiest people in the United States live, you will imagine wealthy cities like Silicon Valley or New York City. You may be surprised to learn that Massachusetts has the highest average income in the country. In 2023, the Bureau of Labor Statistics estimates that the average income in that area will be $60,690 per year (per NBC Los Angeles), reflecting gross income.
While the typical annual salary for workers in Washington DC exceeds $84,450, Massachusetts has the highest overall income. People in Massachusetts make more money for a variety of reasons. Biotechnology and engineering, known for creating good-paying jobs, is booming. Also, major universities like Harvard University and the Massachusetts Institute of Technology are producing more high-income earners, which could help push up the nation’s average salary.
Migration of wealthy young Americans
Many wealthy young Americans are moving from expensive places like New York and California to expensive states like Florida and Texas. But if you want more rich young people, Washington, D.C. is the place to go. A recent study by SmartAsset using IRS data for 2021 examined the average annual adjusted gross income for people between the ages of 26 and 35 who earn at least $200,000. Washington stands out for having twice the average number of high-income young people. In Washington, 13% of those earning more than $200,000 are between the ages of 26 and 35, above the national average of 5.7%, per CNBC Make It.
In this respect, Washington outperforms California slightly, and 10% of top earners are young professionals. Other states like New York, Massachusetts, and New Jersey have impressive percentages of high-income young people.
Cities like Seattle, where early career entrepreneurs can earn big bucks in the growing technology and healthcare sectors, are key contributors to Washington’s successful young population. It is also a desirable destination for individuals who are looking for financial benefits because it is not subject to federal income tax. Hawaii is the only state—except for the District of Columbia—that has a higher average annual cost of living than Massachusetts, according to the Missouri Center for Economic Research and Reporting.