Americans believe money can buy happiness

Greenwood Village, COLO—Can money buy happiness? The answer is “yes” for 59 percent of Americans (72% of Millennials and 67% of Gen Z) and the price tag is $1.2 million according to new research from Empower, a leader in financial planning, investing and advice, though just 17 percent of people say financial contentment is about reaching a certain net worth.

Most associate a “Return on Happiness” with on-time bill payments (67%), being debt-free (65%), affording everyday luxuries without worry (54%), and owning a home (45%). Half of people say contentment is found in spending on experiences with those they cherish (53%) and in optimism for what’s next, including retiring on their own terms (37%).

Still, there are roadblocks to happiness for many (67%), with 73 percent of Americans saying they’re experiencing financial stress. In the current environment, people estimate they’ll have to delay their expected retirement by three years to age 63, on average, and the clock turns back five years for those without a financial plan. Economic pressures like inflation (81%), rising costs (81%), interest rates (66%), and student loans (32%) are dampening a sense of prosperity. Half of people say they carry debt (54%, and 72% of Gen X), and 36 percent could not handle an unforeseen expense over $500 without real worry.

For many, well-being is rooted in a sense of security of a financial plan (73%). Americans with a more detailed financial plan are about three times as likely 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. A spirit of financial confidence prevails with 7 in 10 saying they have clear financial goals and Americans continue to envision a bright future,”  Carol Waddell, president of Empower Personal Wealth, said.

More key findings from Financial Happiness:

Happiness in money milestones: Though 7 in 10 (71%) believe more money would solve most of their problems, for a third (32% overall, and 37% of Boomers) a relatively attainable gain of $15,000 would make a meaningful impact in their lives, boosting Americans’ feeling of financial happiness for six months. That number surges to 42 percent with a $25,000 gain (50% of Boomers), and just $5,000 would do it for 17 percent.

Millennials estimate needing more wealth than other generations to be comfortable: When it comes to salary, Americans say they need $284,167 per year to be happy, with men’s estimates much higher than women ($381k and $183k, respectively). Millennials put the number at $525k, Gen Z $128k, Gen X $130k, and Boomers $124k, annually.

Retirement sparks joy, but timing may be reset: Gen Z plans to retire the soonest of all generations, at age 54 – though they’ve adjusted estimates up from age 49 just 12 months ago. Future generations may not be able to count on an inheritance boost for their savings: 67 percent of survey respondents value being able to take care of themselves today more than passing on wealth to future generations, including 75 percent of Boomers.

Work to live, and many count on employers for important money matters: Americans see work as transactional (75%) and if money were no object, two-thirds of Americans (64%) would quit their job tomorrow. Still, for 37 percent, saving for retirement is a top goal for the year ahead and 67 percent believe their employer has a responsibility to help with financial planning, especially for retirement with 401(k) options. Three in 4 workers (72%) say they’d like to receive financial coaching to decrease financial stress.

Advice is a top factor in determining financial happiness: More than half (52%) know what their financial goal is but feel they don’t know how to get there. Americans rank getting good money advice (63%) as a key determinant of financial happiness.

A coffee break from social media: For many, happiness is defined by financial flexibility: 62 percent of Millennials say they’re willing to spend $7 on a daily coffee because of the joy it brings. Seventy-three percent of people say they’d give up social media if it meant financial happiness.

Financial happiness is about health as much as wealth: Americans agree that a boost in financial happiness would make people healthier overall (79%), including generating more productivity/creativity at work (77%), helping build generational wealth (84%), inspire people to pay it forward (78%), and help close the wealth gap (75%).  

“The financial professionals at Empower combine the power of advice with technology to help Americans get on the path to financial freedom,” Waddell said. “With financial goals in mind and a solid plan to reach them, savers can spend more time doing the things that make them happy in their working years and beyond.”

The full “Financial Happiness” report with more findings exploring what’s next in life, work and play can be found on The Currency™.

*ABOUT THE STUDY

The Empower “Financial Happiness” study is based on online survey responses from 2,034 Americans ages 18+ fielded by The Harris Poll from Aug. 7 to 14, 2023, and using data from the Empower Personal Dashboard™. The survey is weighted to be nationally representative on the following dimensions: age, gender, education, race, region, income, size of household, marital and employment status. For this study, the sample data is accurate to within + 2.9 percentage points using a 95 percent confidence level.