Some people think money can buy happiness.
Millennials say they need a $525,000 salary to achieve financial happiness, the highest among all generations, according to a recent Empower survey conducted by the Harris Poll.
Here are the yearly salaries Americans of different generations say they need to feel happy, according to the poll:
Millennials, the generation born roughly between 1981 and 1996, far outpace the other generations with their salary desires. Their desired salary is more than triple that of Gen X, which had the next highest salary needs of any group.
Millennials are also at the prime age for several major financial decisions, such as purchasing a home and having children, which could be related to their relatively higher salary demands for financial happiness. Respondents defined happiness in a variety of ways, including paying bills on time, living debt-free, affording everyday luxuries without worry and owning a home.
“Millennials are the generation of those who encountered the harsh reality of the American Dream myth,” Erika Rasure, financial wellness advisor at Beyond Finance told MarketWatch. “Those dwindled hopes of escaping debt are the aftermath of economic conditions that shaped their outlook as they came of age in the mid-2000s.”
Several obstacles have altered millennials’ views on financial happiness, she said.
“The Great Recession, the COVID-19 pandemic, rising student loan debt, lowered salaries, and the housing market have impacted how these Americans define safety,” Rasure said. “Happiness and protection for Millennials come in the form of cash to create the comfort and security they seek.”
Just how big is that $525,000 salary?
The median weekly earnings for a U.S. worker are $1,059, which would be $55,068 for the entire year, according to the Bureau of Labor Statistics. That means millennials, at least according to this survey, say they need nearly 10 times the median salary to achieve financial happiness — and other generations say they need more than double that median amount.
“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,” said Carol Waddell, the president of Empower Personal Wealth.
The survey, which was conducted from Aug. 7 to Aug. 14, included responses from 2,034 Americans over age 17 and had a margin of error of 2.9 percentage points.
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The survey also found that 71% of Americans believe that “having more money would solve most of my problems.” But money’s relationship with happiness is a complicated one, according to research over the years. Many studies have shown that money and happiness are correlated, but to what extent is still unknown.
For example, a prominent 2010 study from psychologist Daniel Kahneman and economist Angus Deaton, both Nobel Prize winners at Princeton University, found that money only impacted emotional well-being up to an income of $75,000 a year. Subsequent research by University of Pennsylvania researcher Matthew Killingsworth, meanwhile, found a well-being boost even above $75,000.
Kahneman and Killingsworth joined forces this year with co-author Barbara Mellers to reanalyze the relationship in an “adversarial collaboration” — finding, in part, that “the flattening pattern exists but is restricted to the least happy 20% of the population.”
“In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness,” Killingsworth said in a statement. “The exception is people who are financially well-off but unhappy. For instance, if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees.”
It’s worth noting that those studies examined the relationship between income and emotional well-being, while the Empower survey specifically measured financial happiness.
The survey comes at a confusing economic time for Americans of all generations. Interest rates remain high amid stubborn inflation, and unemployment remains low as the Federal Reserve attempts to achieve a much-discussed soft landing for the U.S. economy.
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