By Luke Lino
Over the past decade, New Jersey has experienced a significant out-migration of seniors, with an estimated 300,000 to 400,000 residents aged 65 and older relocating to other states. This trend has had a substantial economic impact, as these departing retirees have taken with them an estimated $613.5 billion to $818 billion in total wealth.
Why Are Seniors Leaving New Jersey?
New Jersey has long been known for its high property taxes and cost of living, which have made it increasingly difficult for retirees to stay in the state. According to Empower.com, the average net worth in New Jersey is approximately $840,178, significantly higher than the national average. However, with home values, healthcare costs, and general living expenses continuing to rise, many seniors are opting for more tax-friendly states.
Where Are They Going?
Many New Jersey seniors are moving to states that offer more favorable tax conditions and lower living costs. Florida remains a top destination due to its lack of state income tax and a generally lower cost of living. Pennsylvania is another popular choice, offering lower property taxes and proximity to family for many retirees. The Carolinas, both North and South, attract seniors with their warm climates and retirement-friendly communities. Additionally, Delaware is becoming increasingly attractive with no sales tax and lower overall living expenses.
The Economic Impact of Senior Out-Migration
This migration pattern is not just a demographic shift; it represents a massive wealth drain for New Jersey. Based on national and state-specific net worth data, the average net worth of a senior aged 65-74 in New Jersey is around $2.15 million, while seniors aged 75 and older have an average net worth of approximately $1.94 million. Given that between 300,000 to 400,000 seniors have left, the total estimated wealth that has moved out of the state ranges between $613.5 billion and $818 billion. This loss in wealth has significant economic consequences, particularly in the real estate market, where there is a declining demand for high-value homes.
Tax revenues are also impacted, as fewer high-income retirees remain to pay property and state taxes. Additionally, local businesses, especially those in the healthcare, retail, and service sectors, experience reduced spending from the senior population.
Who Is Replacing Them?
While seniors are leaving, New Jersey is seeing an influx of younger professionals, immigrants, and middle-income families, particularly in urban and suburban areas. Many of these new residents are drawn to the state due to its proximity to New York City and Philadelphia, its strong job market, and high-ranking school systems. However, this demographic shift does not necessarily replace the economic impact of departing seniors, as younger workers tend to have lower accumulated wealth and different spending patterns.
Can New Jersey Reverse the Trend?
In response to this wealth flight, policymakers have introduced measures such as Stay NJ, a property tax relief program aimed at helping seniors remain in the state. However, unless New Jersey addresses the core issues of high taxation, cost of living, and retiree-friendly policies, the trend is likely to continue.
The exodus of seniors from New Jersey is not just about relocation—it’s about economic sustainability. With hundreds of billions in wealth leaving the state, New Jersey must reconsider its approach to taxation and senior retention strategies if it hopes to slow or reverse this trend.
We’re Here for You
If you’re nearing retirement or already retired, understanding how state taxes, cost of living, and relocation decisions impact your long-term wealth is crucial. Whether you plan to stay or move, having a solid financial strategy can help you preserve your wealth and enjoy retirement with confidence.
Want to explore your options and make informed decisions about your financial future? Schedule a complimentary consultation with Millstone Financial Group today by calling (732) 385-8544 or emailing [email protected]. We’re here to help you navigate what’s next.
Sources:
- U.S. Census Bureau: “Domestic Migration of Older Americans: 2015–2019”
- Empower.com: “Average Net Worth by State”
- LexingtonLaw.com: “Average Net Worth by Age”
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