“Money can’t buy happiness;” it’s a truism as old as time and one Millennials and Gen Z are rejecting (like everything else).
“Can money buy happiness?” Empower recently—and rhetorically—asked. “The answer is “yes” for 59% of Americans (72% of Millennials and 67% of Gen Z).
The price of that happiness is a cool $1.2 million, according to research from the firm, although just 17% of people said financial contentment is about reaching a particular net worth.
Most associated a “return on happiness” with on-time bill payment (67%), being debt-free (65%), affording everyday luxuries without worry (54%), and owning a home (45%).
Additionally, half of respondents said contentment is found in spending on experiences with those they cherish (53%) and optimism for what’s next, including retiring on their terms (37%).
Still, there are roadblocks to happiness for many, with 73% 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 it’s pushed five years further 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 respondents said they carry debt (54%, and 72% of Gen X), and 36% 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.
More key findings:
- Happiness in money milestones: Though seven 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.
- 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's ($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% of survey respondents value being able to take care of themselves today more than passing on wealth to future generations, including 75% 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 jobs tomorrow. Still, for 37%, saving for retirement is a top goal for the year ahead, and 67% believe their employer has a responsibility to help with financial planning, especially for retirement with 401(k) options.
- Advice is a top factor in determining financial happiness: More than half (52%) know their financial goal but don’t know how to get there. Americans rank getting good money advice (63%) as a key determinant of 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%).
