Retired emigrants from NJ take their money elsewhere
We've told you that retirees have been leaving New Jersey lately. But what about the economic effects of that exodus on the state?
For one thing, many of those leaving are baby boomers between the ages of 52 and 70 who are generally more affluent, according to James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.
"They've built up a lot of equity in their homes in New Jersey, so when they cash out, they are able to live a very good life in much more affordable locations," Hughes said.
He said the economic benefit for these people extends to spending and taxing.
"That money is then taxed in other states, whether it's income taxes, sales taxes and/or other fees, or what have you," he said. "It is a financial loss to the state of New Jersey."
When retirees leave the state, that also means less revenue for programs that New Jerseyans who are left behind may find useful. A revenue shortfall like the one the Garden State experienced this year makes it difficult to make changes to the tax system.
Hughes said the retirees take their incomes with them, whether pensions or Social Security. The short-term effect will be minor, "but it could cascade into something very significant as we move toward the end of the decade. We are at a time when we have this huge cohort that's potentially leaving the state."
As it stands right now, New Jersey accounts for 3 percent of the nation's economic activity and 3 percent of its jobs. But health care costs for seniors continue to rise -- currently checking in at third-highest in the country. At the same time, both jobs and opportunities for supplemental income are becoming more scarce for New Jersey's older residents.
The Carolinas and Florida are three key states for Jersey retirees. All offer a cheaper cost of living and lower taxes for retirees.