The Big Apple likes to brag about its size, from its big celebrity names to its big skyline. But there’s a few more things that New York does bigger than anywhere else: taxes and cost of living. And this isn’t true of just New York - its neighbors in Connecticut and New Jersey also face hefty taxes and high costs of living. Simply put, it’s become incredibly expensive to live in and around New York city these days.     

Sky High Taxes

Let’s start with taxes. According to a 2019 report by the Tax Foundation, the last year economic data was available, New York has the highest tax burden in the entire country, with 14.1% of income going to state and local taxes. For comparison Arizona, which has the country’s fifth least burdensome tax regime, collects only 8.7% of income. Other states like Texas and Florida help keep their tax burdens low, 8% and 8.8% respectively, in part due to the lack of a state income tax. The pain is even more acute for those living in New York city, where tax rates for high earners are the highest in the nation. If you choose to live in the New York city area, you’re going to get very familiar with your accountant.

While New York leads the nation in tax burden, its tri-state area neighbors are right behind it: Connecticut has the country’s second most burdensome taxes at 12.8% while New Jersey has the country’s seventh most burdensome taxes at 11.7%. This makes it hard to escape high taxes if you’re living and working around New York.  Even if you choose to move to the suburbs you’re likely to still live in a high tax area.  

Expensive Cost of Living

Along with the high tax burdens, the real estate markets in New York, New Jersey and Connecticut further inflate the cost of living in the tri-state area. New York city has the most expensive real estate market in the country, with housing expenditures over 350% the national average. And again there is little relief for those looking to move outside of the city - suburban New York and Connecticut both have highly competitive rental markets, and New Jersey has the nation’s fifth highest rental rates.  

The high cost of living isn’t just a product of the housing markets and taxes - just about everything is more expensive in and around New York city. According to the Economic Policy Institute, a 2 person household with no children in the New York metro area is forced to spend roughly $62,257 every year on necessities alone, which includes not only housing but also food, healthcare, and transportation (but excludes savings or discretionary spending for things like entertainment). This is only slightly below the median American worker’s annual income, which was $67,521 in 2020. For many people, this makes life in the New York metro area unaffordable. In another stark example, the median cost for monthly parking in New York city, which is estimated at over $600 a month, exceeds or matches rents in some parts of the country. While things may be cheaper outside of Manhattan, the high cost of living persists throughout the city and its suburbs. If you’re looking to save money in the coming year, getting out of the New York city area might be the easiest way to do so. 

The Great Escape

It’s no surprise that high cost states like New York make for unpopular retirement destinations. Understandably, many people simply find the costs of New York to not be worth it, and for many of the people who do move they find it often pays for itself (and then some) over the long haul. This is one of the main reasons thousands of Americans move from high cost areas like New York or California, to more affordable destinations like Arizona and Florida each year.

Sunbound is the best way to pay for senior living. If you want to learn more about how Sunbound can help make senior living more affordable for residents and easier to manage for communities, email us at info@sunboundhomes.com or request a demo here. Sunbound is on a mission to make senior living more affordable for everyone.