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November 21, 2023 at 04:22 PM
What You Need to Know
- Survey participants said they needed $284,167 per year to be happy, but smaller amounts are tied to significant boosts.
- People with a financial plan have higher levels of money-related happiness.
- Being able to afford daily luxuries without worry is a big driver of happiness.
Fifty-nine percent of Americans, including 72% of millennials and 67% of Generation Z, think that money can buy happiness. The price tag: $1.2 million, according to a recent study from Empower, a provider of financial planning, investing and advice.
But only 17% of participants say financial contentment is about reaching a certain net worth.
Two-thirds associate a “return on happiness” with on-time bill payment and being debt free. About half say it is affording everyday luxuries without worry, and 45% cite owning a home. Half of respondents find contentment in spending on experiences with those they cherish and in optimism for what’s next, including retiring on their own terms.
Still, roadblocks to happiness exist for many Americans. Seventy-three percent say they are experiencing financial stress. In the current environment, people estimate that they will have to delay their expected retirement by three years to age 63, on average, and by five years for those without a financial plan.
Economic pressures such as inflation, rising costs, interest rates and student loans are dampening a sense of prosperity, Empower found. Half of people say they carry debt, and more than a third acknowledge that they could not handle an unforeseen expense of more than $500 without real worry.
According to the study, 73% of participants say their well-being is rooted in a sense of security of having a financial plan. Those with a more detailed financial plan are about three times likelier to report greater happiness in money matters.
“Every generation has grappled with questions of how to calculate financial happiness: hard work, a lot of planning, consistent savings and even a little bit of luck, in just the right measures,” Carol Waddell, president of Empower Personal Wealth, said in a statement. “A spirit of financial confidence prevails with 7 in 10 saying they have clear financial goals and Americans continue to envision a bright future.”
The Harris Poll conducted an online survey in early August of 2,034 American adults, using data from the Empower Personal Dashboard.
Striving for Financial Happiness
Seventy-one percent of respondents in the Empower study believe that more money would solve most of their problems. For 32% overall and 37% of baby boomers, a gain of $15,000 would have a meaningful effect in their lives, boosting their sense of financial happiness for six months.
