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All Contents © 2020The Kiplinger Washington Editors
By Dan Burrows, Contributing Writer
| March 1, 2019
Millionaires are popping up in America like weeds. Indeed, the U.S. hasn't seen such a torrid increase in the ranks of millionaires in more than a decade.
They can thank record levels for stock prices.
"The 7% rise in millionaire households in 2018 is the strongest rate of growth in that market since the financial downturn 10 years ago," says David M. Thompson, managing director at Phoenix Marketing International, which tracks the affluent market. "The growth in capital markets in 2018 clearly lifted many more households into the millionaire ranks."
Total households in the U.S. with at least $1 million in investable assets have increased by 534,000 in the past 12 months, Thompson notes. In the past decade since the financial crisis, the number of millionaire households has grown by more than 2 million.
As a result, 6.21%, or 7,698,765 U.S. households out of 123,942,960 total households, can now claim millionaire status. That's up from only 5.8% a year ago. To reach that lofty level, you must have investable assets of $1 million or more, excluding the value of real estate, employer-sponsored retirement plans and business partnerships.
When imagining where America’s millionaires live, most people probably think of California and New York. But although those states have their fair share of millionaires in terms of raw numbers, they don't have the highest concentrations of rich households. It turns out there are numerous states with higher percentages of well-off households than New York or California, several of which probably will surprise you. And don't forget that between living costs and taxes, a million dollars goes much further in some states than others.
Here's a look at the millionaire ratings for all 50 states (and the District of Columbia), based on the percentage of millionaire households in each. Just for good measure, we're also providing important tax and cost-of-living information.
Estimates of millionaire households provided by Phoenix Marketing International, a firm that tracks the affluent market. Investable assets include education/custodial accounts, individually owned retirement accounts, stocks, options, bonds, mutual funds, managed accounts, hedge funds, structured products, ETFs, cash accounts, annuities and cash value life insurance policies. Data on household incomes and home values are from the U.S. Census Bureau. Living costs are based on the Council for Community and Economic Research’s Cost of Living Index. Tax information is as of 2018.
Millionaire households: 41,685
Total households: 1,133,149
Concentration of millionaires: 3.68%
Median income for all households: $42,009 (U.S. median: $57,652)
Median home value: $109,300 (U.S. median: $193,500)
Mississippi might have the lowest concentration of millionaire households per capita in the U.S., but it also has the lowest overall cost of living in the U.S. It's almost 19% cheaper to live in the Magnolia State vs. the national average, according to the Council for Community and Economic Research (C2ER). That means a million bucks goes further than it does elsewhere. Just have a look at Tupelo and Hattiesburg, which rank among the cheapest cities in the U.S.
Mississippi also has some of the lowest taxes. Indeed, it's one of Kiplinger's 10 most tax-friendly states in the U.S., thanks to relatively light property and gas taxes.
Millionaire households: 29,031
Total households: 756,671
Concentration of millionaires: 3.84%
Median income for all households: $44,061
Median home value: $111,600
West Virginia has a relatively low concentration of millionaires, but its median real estate taxes are among the lowest in the U.S., according to the Tax Foundation. The Mountain State's sales taxes are reasonable, too. Like many western states, West Virginia benefits from natural resources such as gas and coal, and collects significant severance taxes from them.
But be forewarned: The state is not particularly tax-friendly for retirees.
A plus for West Virginia residents is that the cost of living is 9.9% lower than the national average, according to the C2ER.
Millionaire households: 45,985
Total households: 1,181,658
Concentration of millionaires: 3.89%
Median income for all households: $43,813
Median home value: $118,500
Arkansas might not be bristling with millionaires, but it has some of the lowest living costs in the U.S., which are 15% below the national average. Heck, the cities of Jonesboro and Conway are two of the least expensive places to live in the entire country.
When it comes to taxes, Arkansas is more of a mixed bag. Property taxes are low in the Natural State, but sales taxes are the third-highest in the country -- even groceries are taxed (albeit at a lower rate). And income tax is particularly complicated in Arkansas.
Millionaire households: 77,671
Total households: 1,772,382
Concentration of millionaires: 4.38%
Median income for all households: $46,535
Median home value: $130,000
Kentucky has fewer than 80,000 millionaire households. But then, with a cost of living 12.3% below the national average, paychecks tend to go further. Groceries run about 10% below the U.S. average, while housing is roughly a fifth less expensive.
The tax situation for all Kentucky residents is mixed. Sales taxes are modest and the property tax burden is light. However, effective income tax rates can be high even for relatively low earners.
For retirees, however, Kentucky is decidedly tax-friendly. The Bluegrass State exempts Social Security benefits from state income taxes, as well as up to $31,110 per person of a wide variety of retirement income.
Millionaire households: 28,928
Total households: 639,110
Concentration of millionaires: 4.53%
Median income for all households: $50,985
Median home value: $176,800
The vast expanse of the Gem State claims only 639,110 households, of which fewer than 30,000 can be considered millionaires. A high concentration of them live in the part of the greater Jackson, Wyoming, area that spills into Idaho.
Happily, for rich and not-so-rich alike, Idaho's overall cost of living is 11.7% below the national average.
Somewhat less upbeat is Idaho's tax picture, which is mixed. Idaho took steps to head off an effective state tax increase from the new Federal tax law. Even so, Idaho's top tax rate of 6.925% kicks in at a fairly low bracket ($22,558 for married joint filers), making its income-tax hit feel more like that of a coastal state.
Millionaire households: 87,849
Total households: 1,929,043
Concentration of millionaires: 4.55%
Median income for all households: $46,472
Median home value: $132,100
Alabama is another state where you don't need a million bucks to live well. Although only 4.55% of its 1.9 million households hit the millionaire threshold, some of the lowest housing costs in the country help spread the wealth. Overall, the cost of living in the Yellowhammer State is 13.4% below the national average.
It also helps that Alabama is one of the more tax-friendly states. Property taxes are the second-lowest in the country, but sales taxes take a bite -- and the full rate is levied on food.
It also helps that Alabama allows you to deduct your federal income taxes (it's one of just of a handful of states with this break). The state also is among the most tax-friendly for retirees.
Millionaire households: 37,520
Total households: 809,287
Concentration of millionaires: 4.64%
Median income for all households: $46,718
Median home value: $163,900
New Mexico is somewhat of a strange bird when it comes to millionaires. Los Alamos, New Mexico, sounds like an unlikely place to find a lot of millionaires, but at 11.6%, it actually has the highest concentration of millionaire households of any small town in the U.S.
Outside of Los Alamos, the state has a more typical concentration of affluence, with fewer than 1 in 20 households claiming investable assets of $1 million or more. That helps keep a lid on living costs, which are 7.2% below the U.S. average.
Unfortunately for residents of all means, the Land of Enchantment isn't particularly tax-friendly -- or a friendly state for retirement. Social Security benefits are subject to tax by the state, as are retirement account distributions and pension payouts.
Millionaire households: 73,325
Total households: 1,543,816
Concentration of millionaires: 4.75%
Median income for all households: $49,767
Median home value: $125,800
The energy industry is a cornerstone of Oklahoma's wealth, so it should come as no surprise that fuel taxes are low. Less appealing? An income-tax structure that puts many people into the highest bracket. Oklahoma also has the sixth-highest combined sales tax rate in the nation.
However, you don't need to be a millionaire to live well in the Sooner State. Not only does Oklahoma offer a cost of living that's more than 13% below the national average, but its largest city offers remarkably affordable prices for its size.
Oklahoma City, a metro area with about 1.4 million people, offers a lot of big-city attractions, from a philharmonic orchestra to the National Softball Hall of Fame and Museum to the NBA's Oklahoma City Thunder. And yet it remains one of the cheapest large U.S. cities in which to live.
Millionaire households: 122,974
Total households: 2,579,621
Concentration of millionaires: 4.77%
Median income for all households: $52,182
Median home value: $130,200
A million dollars sure goes far in some parts of Indiana. Richmond, Ind., where the cost of living runs 21% below the U.S. average, happens to be the cheapest small town in America. The cost of living in Indiana is 12.3% below the national average.
Although living costs are low, Indiana isn’t a great state for retirees. Indeed, it's one of Kiplinger's least tax-friendly states for retirees. While the state exempts Social Security benefits and offers limited exemptions for military pensions and federal civil-service pensions, IRAs, 401(k) plans and private pensions are fully taxable. And counties have the authority to levy their own income taxes on top of the state's flat tax.
Millionaire households: 21,530
Total households: 446,176
Concentration of millionaires: 4.83%
Median income for all households: $50,801
Median home value: $209,100
A good deal of Montana's wealth stems from its abundance of natural resources. Agriculture, oil, copper and timber all play an important role in the economy, to say nothing of travel and tourism. Nearly 5%, or more than 21,000 households, can claim millionaire status. And a dollar tends to go father in the Treasure State. Montana's cost of living is 7.1% lower than the national average.
The good news for citizens across the income spectrum is that Montana has no general state sales tax. The bad news is that the top income rate of 6.9% kicks in at just $17,900 of taxable income, and Montana taxes virtually all forms of retirement income, including Social Security.
Whether you're still working or a retiree, Big Sky Country isn't the most tax-friendly place to live.
Millionaire households: 96,084
Total households: 1,988,953
Median income for all households: $48,781
Median home value: $148,600
From Hilton Head Island to the Midlands region to the Blue Ridge Mountains, South Carolina has something for everyone -- but you don't have to be a millionaire to enjoy its many pleasures. Relatively low prices for housing and transportation help keep the Palmetto State's cost of living under control. According to the C2ER, South Carolina is 7.1% cheaper than the national average.
Although South Carolina boasts the seventh-lowest property taxes in the country, many taxpayers find themselves in the highest income bracket. That's because the top 7% rate kicks in at just $14,600 of income.
Millionaire households: 128,738
Total households: 2,646,608
Concentration of millionaires: 4.86%
Median income for all households: $48,708
Median home value: $151,700
Tennessee is known for country music, BBQ and bourbon more than an abundance of millionaires, but the state should get more recognition for its affordability. Indeed, Memphis and Knoxville are two of the least expensive cities in the U.S., and more broadly, the state's cost of living is 13.2% below the national average.
Tennesseans also tend to keep more of their hard-earned dollars. The Volunteer State has no broad-based income tax and is phasing out its tax on stock dividends and interest income.
Millionaire households: 89,097
Total households: 1,821,634
Concentration of millionaires: 4.89%
Median income for all households: $46,710
Median home value: $152,900
Agriculture, the petroleum industry, shipping and tourism are staples of the economy of Louisiana, helping to create almost 90,000 millionaire households.
Folks who call the Pelican State home enjoy a cost of living that 10.2% below the national average. They also benefit from property taxes among the lowest in the country, which help's make Louisiana one of Kiplinger's top 10 most tax-friendly states. It also offers a bayou full of tax breaks to retirees.
Millionaire households: 120,938
Total households: 2,441,372
Concentration of millionaires: 4.95%
Median income for all households: $51,542
Median home value: $145,400
Almost 5% of Missouri's households have at least $1 million in investable assets, but there's nothing elite about that level when it comes to paying taxes. Missouri took steps in 2018 to reduce its income tax bite, which has historically been a big one, with most taxpayers hit by its top marginal rate (5.9% for 2018). That rate drops to 5.4% in 2019.
Helpfully, the cost of living in Missouri is 14.3% lower than the national average. Housing is particularly affordable, running 27% below the rest of the U.S. In a notable downside for both retirees of all means: Missouri ranks 42nd in the nation for senior health.
Millionaire households: 201,449
Total households: 4,061,714
Concentration of millionaires: 4.96%
Median income for all households: $50,320
Median home value: $161,000
North Carolina has a lot going for it whether you're a millionaire or not. It's 11.7% less expensive to live in the Tar Heel State than the national average, and Durham is one of the happiest places to retire in the U.S., according to the according to the Gallup-Sharecare Well-Being Index.
Taxes are another plus. The state has been shaking up its tax structure, switching out graduated income tax brackets for a flat tax and capturing more services with its sales tax. The tax rate for 2018 was 5.49%; this year, it has dropped to 5.25%
Millionaire households: 17,776
Total households: 352,611
Concentration of millionaires: 5.04%
Median income for all households: $54,126
Median home value: $152,700
South Dakota is better known for Mount Rushmore, agriculture and the great outdoors than millionaires, but more than 1 in 20 households have at least $1 million in investable assets.
It also happens to be a great place to retire.
Affordability is the main factor. The cost of living is 9.4% below the national average. It's also one of the most tax-friendly states. And since South Dakota ranks second in the U.S. for fiscal soundness, according to a recent report from George Mason University's Mercatus Center, you can have high confidence that it can keep up with short-term expenses and long-term financial obligations.
Millionaire households: 56,748
Total households: 1,115,122
Concentration of millionaires: 5.09%
Median income for all households: $55,434
Median home value: $216,400
If you need proof that the house always wins, just take a look at Nevada. Median income for all households is slightly below the U.S. average. Meanwhile, Las Vegas Sands (LVS) CEO Sheldon Adelson -- the state’s richest person -- has a net worth of $36.2 billion.
But you don't have to go to Las Vegas to rub elbows with the Silver State's millionaires. Gardnerville Ranchos and Elko, Nevada, are among the top 20 small towns with the highest concentration of millionaires in the U.S.
The cost of living in Nevada is essentially on par with the national average, but residents catch a break on taxes. As a no-income-tax haven, Nevada is one of Kiplinger's top 10 most tax-friendly states.
Millionaire households: 29,043
Total households: 567,486
Concentration of millionaires: 5.12%
Median income for all households: $53,024
Median home value: $179,900
There are fewer than 30,000 millionaire households in Maine -- a state in which rich and poor alike face relatively high living costs and taxes. Expenses in the Pine Tree State run 9.5% above the national average. Residents pay more for groceries, housing and utilities, in particular.
Although it has been working to lower its income taxes, Maine's lowest rate still is higher than some other states' maximum rate. Indeed, the Pine Tree State is one of Kiplinger's least tax-friendly states.
Millionaire households: 243,608
Total households: 4,686,753
Concentration of millionaires: 5.20%
Median income for all households: $52,407
Median home value: $135,100
NBA superstar LeBron James might have forsaken the Cleveland Cavaliers for the Los Angeles Lakers, but the great state of Ohio has plenty of other millionaires to fill his sizable shoes. Nearly a quarter of a million households -- out of 4.7 million total -- have at least $1 million in investable assets in the Buckeye State.
Although Ohio can't compete with L.A. for glamour, LBJ may miss Ohio's affordability and comparatively lighter tax bite. The cost of living in Ohio is 14% below the national average. (Los Angeles happens to be the ninth most expensive city in the U.S.)
And although Ohio isn't exactly tax-friendly, no state goes after big earners quite like the Golden State.
Millionaire households: 66,442
Total households: 1,275,070
Concentration of millionaires: 5.21%
Median income for all households: $56,570
Median home value: $137,200
The farming and food-processing powerhouse of a state has a relatively low cost of living, but it can be tough on residents' wallets when it comes to paying taxes.
Iowa has a top tax bracket of 8.53% and brings it to bear on a relatively low level of taxable income, giving the Hawkeye State an income-tax bite that exceeds many East Coast states. Nor does Iowa go easy on retirees.
Easing the sting a bit is a cost-of-living index that’s 11.9% lower than the U.S. average.
Millionaire households: 124,968
Total households: 2,359,204
Concentration of millionaires: 5.30%
Median income for all households: $56,759
Median home value: $169,300
Bucolic Wisconsin's 124,968 millionaire households enjoy a relatively affordable cost of living, but taxes in the Badger State can be a bit of a burden.
Wisconsin recently lowered income tax rates and reduced the number of brackets. But many residents of the Badger State will find themselves in the 6.27% bracket, which kicks in on income above only $22,900 for singles and $30,540 for joint filers. At the same time, property taxes are high.
On the other hand, it's 7.3% cheaper to live in Wisconsin than the country as a whole.
Millionaire households: 40,549
Total households: 764,862
Median income for all households: $56,675
Median home value: $142,400
When it comes to the well off and Nebraska, one name immediately comes to mind: Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.B), is the Cornhusker State's richest -- and most famous -- resident. But while the Oracle of Omaha is clearly in a league if his own, Nebraska does have 40,549 other households with at least a million bucks in investable assets.
The cost of living in Nebraska is 10% lower than the national average, according to Council for Community and Economic Research.
When it comes to paying taxes, Nebraska is ranked as "not tax-friendly" by Kiplinger. True, the state has been making efforts to reduce its income tax bite, including creating a personal exemption credit in 2018 so that the new federal tax law wouldn’t raise individuals' state taxes. But property taxes are the among the highest in the country.
Millionaire households: 142,085
Total households: 2,637,329
Concentration of millionaires: 5.39%
Median income for all households: $53,510
Median home value: $193,200
Like Florida, Arizona is a retirement haven and one of Kiplinger's top 10 most tax-friendly states for millionaires and non-millionaires alike. While the Grand Canyon State does have an income tax, the rates are notably low. If you're a joint filer, you won't hit the top bracket until your income is over $300,000. Sales taxes lean high, though, and some cities tax groceries.
Helpfully, Arizona is not quite as inexpensive as Florida. The cost of living in the state is equal to the national average.
Millionaire households: 214,315
Total households: 3,944,777
Concentration of millionaires: 5.43%
Median income for all households: $52,668
Median home value: $136,400
Michigan doesn't have the highest concentration of millionaires in the country, but it is among the top states for billionaires. According to Forbes, the Great Lakes State claims 11 billionaires, led by Hank & Doug Meijer, whose supermarket empire gives them a net worth of $7.3 billion.
At the other end of the spectrum, Michigan is home to one of the least expensive places to live in the U.S. The cost of living in Kalamazoo is 20.5% below the U.S. average. Overall, Michigan is 14.1% cheaper than the national average.
Michigan's tax situation is mixed. It's one of just a handful of U.S. states with a flat tax -- the rate is a modest 4.25%. But cities can levy income taxes as well. Property taxes, particularly in Detroit, are steep.
Millionaire households: 211,662
Total households: 3,891,635
Concentration of millionaires: 5.44%
Median income for all households: $52,977
Median home value: $158,400
With a cost of living 11.1% lower than the national average, a million dollars goes a bit further in the Peach State than elsewhere.
But taxes do take their bite. Georgia's tax brackets mean that many taxpayers will find themselves paying the top marginal rate, which kicks in at just $10,000 of taxable income for married couples filing jointly or $7,000 for individual filers. Sales taxes lean high, and in some areas, groceries will be taxed as well.
Millionaire households: 62,073
Total households: 1,140,014
Median income for all households: $55,477
Median home value: $139,200
Kansas is known more for affordable living than for putting on the ritz. Indeed, Salina and Pittsburg, Kansas, are two of the cheapest small towns in America. Statewide, the cost of living in Kansas is 11.3% cheaper than the national average.
Offsetting that somewhat is the fact that Kansas is not the friendliest state when it comes to taxes. Sales taxes are high (and are applied to groceries), and property taxes are steep, too. Taxes in Kansas aren’t kind to retirees either.
Against that backdrop, the Sunflower State has 62,073 millionaire households out of a total of about 1.1 million households.
Millionaire households: 454,878
Total households: 8,314,234
Concentration of millionaires: 5.47%
Median income for all households: $50,883
Median home value: $178,700
Florida's popularity as a retirement destination helps boost its concentration of millionaires. Indeed, an hour's drive north of Walt Disney World, you’ll find The Villages, a sprawling retirement haven with one of the highest numbers of millionaires per capita in the country.
The Sunshine State is well-known for its absence of a state income tax, which helps put it into Kiplinger's top 10 most tax-friendly states. Property taxes are below the midpoint for the U.S. The cost of living, meanwhile, is 3.6% below the national average.
Millionaire households: 13,130
Total households: 239,441
Concentration of millionaires: 5.48%
Median income for all households: $60,938
Median home value: $204,900
Wyoming might have the smallest population of any state, but it has one of the higher concentration of millionaires, thanks to abundant natural resources and recreational activities.
Wyoming accounts for about 40% of the nation’s coal production, and the vast majority of the state’s output comes from the Gillette area, which has a high concentration of millionaires as a result. Wyoming's famed Jackson Hole valley, with three major ski resorts and an abundance of other year-round recreational activities, also is a mecca for millionaires.
Thanks to abundant revenue that the state collects from oil and mineral rights, Wyoming millionaires shoulder one of the lowest tax burdens in the U.S.
Millionaire households: 15,090
Total households: 260,607
Concentration of millionaires: 5.79%
Median income for all households: $57,808
Median home value: $220,600
Tiny Vermont has just 15,090 millionaire households, and the Green Mountain State is one of the tougher states when it comes to taxing millionaires. It's a pricey place to live if you’re wealthy. Among other policies, income tax rates reach 8.75%. And Vermont's property taxes are the eighth-highest in the U.S.
Vermont is a comparatively expensive state in which to live in other ways, too. The state’s cost of living is 12.8% higher than the national average.
Millionaire households: 97,160
Total households: 1,671,063
Concentration of millionaires: 5.81%
Median income for all households: $56,119
Median home value: $265,700
The Beaver State's cost of living is 4.1% higher than the U.S. average. That/s partly due to a median home value of more than $265,700, which is well above the national average.
Oregonians also face the country’s highest income tax bracket. The 9.9% rate is applied to taxable income over $125,000 ($250,000 for married couples filing jointly), and the lowest bracket is already 5%.
Property taxes are on the high side, too.
Millionaire households: 19,248
Total households: 327,393
Concentration of millionaires: 5.88%
Median income for all households: $61,285
Median home value: $174,100
The explosion in shale oil drilling has minted many a millionaire in North Dakota over the past decade. Indeed, small towns such as Dickinson and Williston, located in the oil-rich Bakken Formation, have some of the highest concentrations of millionaires in the U.S. Last year, as oil prices reached multiyear highs for several months, North Dakota enjoyed record-breaking oil production.
North Dakota is one of the nation's tax-friendliest states. The Peace Garden State offers modest sales taxes that favor agriculture and has been cutting income taxes for several years in a row -- to the point that they're barely there. To top it off, the cost of living in is 2.9% lower than the national average.
Millionaire households: 309,174
Total households: 5,090,306
Concentration of millionaires: 6.07%
Median income for all households: $56,951
Median home value: $170,500
More than 6% of Pennsylvania's 5 million-plus households have investable assets of $1 million or more, excluding the value of real estate, employer-sponsored retirement plans and business partnerships. That puts the state's concentration of millionaires close to the national percentage, even as the cost of living in the Keystone State is 1.1% lower than the U.S. average.
The Keystone State's tax picture is mixed. It has a flat income tax rate of 3.07%, but municipalities can add to that with local earned income taxes. While sales taxes are relatively low, the state's fuel, tobacco and alcohol taxes are notably high.
Millionaire households: 622,065
Total households: 10,131,556
Concentration of millionaires: 6.14%
Median income for all households: $57,051
Median home value: $151,500
Everything is bigger in Texas. No, it doesn’t have the highest concentration of millionaires, but in terms of raw numbers, only California has more than the Lone Star State's 622,065 millionaire households.
Heck, Texas is so big it not only has two of the smallest towns with the most millionaires in the U.S. -- Andrews and Fredericksburg -- but it's also home to four of the 10 cheapest U.S. cities in which to live. (Those would be Brownsville, Wichita Falls, Harlingen and McAllen.) On average, the cost of living in Texas is 8.7% lower than the U.S. average.
Texas is a place of extremes when it comes to taxes, too. There's no income tax at all. On the other hand, sales taxes run high, as do property taxes.