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Written by: Empower
What’s the secret to Financial Happiness? To most Americans, it’s more than net worth. Empower’s new research explores the state of happiness in life, work, and play to find out what it really takes — the experiences, the Money Talks, the planning and investments — to be financially happy in your working years and beyond.
It’s an age-old question: can money buy happiness?
The answer is “yes” for 6 in 10 Americans (59%), including 72% of Millennials and 67% of Gen Z. The first word that comes to mind when people think about financial happiness is freedom, followed by security and relief, according to the 2,034 U.S. adults we surveyed.
For centuries, Americans have been rewarded for their relentless pursuit of happiness — in life, work, play – and of course, money. If financial happiness has a price tag, the average person believes it amounts to $1.2 million.
But that’s not the full story. It turns out that a little goes a long way, as our research finds that incremental financial wins make a massive impact on Americans’ wellbeing.
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% with a $25,000 gain (50% of Boomers), and just $5,000 would do it for 17%.
Our data shows that a “Return on Happiness” (ROH) isn’t just about reaching a far-out net worth – it’s achieved by addressing money milestones like being able to pay bills on time (67%), living debt free (65%), affording everyday luxuries without worry (54%), and owning a home (45%). For over half of people, 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 most (67%), 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 the clock turns back a full 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 people’s sense of prosperity. Over half of people say they carry debt (54%, and 72% of Gen X), and 36% could not handle an unforeseen expense over $500 without real worry.
For many, wellbeing 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, including goal setting, debt, net worth, and financial allies. Yet 43% feel that access to advice is beyond their reach, and 57% say they’d wish they’d gotten financial advice sooner.
Independence, resilience, and generosity are strongly linked to feelings of financial happiness: a majority say they will know they’ve reached it when they don't have to rely on anyone else financially (87%), can withstand unexpected financial needs (87%), or are able to financially take care of loved ones (84%). For many, happiness is also defined by financial flexibility in the here and now, with 62% of Millennials saying they’re willing to spend $7 on a daily coffee because of the joy it brings.
Americans agree that financial happiness can have a transformative effect across many measures of the good life: a sense of accomplishment and productivity at work (77%) generational wealth (84%), inspiring greater innovation (71%), and boosting their overall health (79%).
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. What’s clear is, a spirit of financial confidence prevails with 7 in 10 saying they have clear financial goals (68%) as Americans continue to envision a bright future.
Financial Happiness key findings:
- Most Americans believe that money can buy happiness, but it amounts to more than net worth: 71% of Americans believe that “having more money would solve most of my problems” and 59% of Americans say money can buy happiness – though just 17% say financial happiness is reaching a certain net worth. Most associate happiness with on-time bill payment (67%) and a debt-free status (65%). For 44% of Americans, including 58% of Gen Z and 55% of Millennials and Gen X, financial happiness means having a good work/life balance.
- The price tag for financial happiness is $1.2 million, and 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 people’s timing may be reset: People expect they’ll have to retire three years later than they expected, at age 63 on average, and the clock is delayed five years for those without a financial plan. Gen Z plans to retire the soonest of all generations, at age 54 – adjusting their plans 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.
- The happiness quotient: Americans are optimistic, though economic factors are dampening feelings of prosperity: 3 in 4 Americans say they’re content and are more satisfied at work (68%) and with their relationships (72%) than with their overall wealth (58%). This may be because 67% say their income isn’t keeping up with inflation, and 42% say their standard of living is declining. Economic pressures like rising costs (81%), interest rates (66%), and student loans (32%) are deflating people’s sense of prosperity. Over half of people say they carry debt (54%, and 72% of Gen X), and 36% could not handle an unforeseen expense over $500 without worrying.
- It’s a work-life transaction for many, though workers trust 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%, 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. 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 to financial happiness. To prepare for retirement, 26% of respondents say they’re working with a financial professional, and 39% recommend talking to an advisor to reduce financial stress.
- Independence, and a cup of coffee, are strongly linked to feelings of financial happiness: A majority say contentment is not having to rely on anyone else financially (87%), being able to withstand unexpected financial needs (87%), and the ability to financially take care of loved ones (84%). For many, happiness is also defined by everyday spending flexibility: 62% of Millennials say they’re willing to pay $7 for 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 (79%) in all aspects of life, including generate more productivity/creativity at work (77%), help build generational wealth (84%), inspire people to pay it forward (78%), and help close the wealth gap (75%).
- The secret to experiencing more happiness? Having a plan of action: Seven in 10 (73%) believe that “a solid financial plan would bring me happiness.” In fact, those with a detailed financial plan seem to experience greater overall life happiness, with a significant boost in their financial well-being.
Happiness is staying current on planning, saving, and investing for life
Key stats:
- If financial happiness had a price tag: More than half of Americans (59%) say money can buy happiness — at a cost of about $1.2 million.
- Everyday milestones matter: The majority of Americans define financial happiness as paying bills on time and in full (67%) and living debt-free (65%).
- A little windfall can do wonders: For 42% of Americans, $25,000 would boost their financial happiness for six months.
- Money miracle: Seven in 10 Americans (71%) say having more money would solve most of their problems.
- Losing sleep: Nearly three in four Americans (73%) experience financial stress.
The magic number
Money can buy happiness — according to 59% of Americans, and that price tag is $1.2 million. From a generational perspective, Millennials are the most invested in this concept: 72% agree, vs. 67% of Gen Z and 58% of Gen X.
Millennials say that happiness comes at the steepest cost, saying they’d need a net worth of $1,699,571, which is 3.5 times more than Gen Z and 1.7 times more than Boomers. The variance could be attributed to substantial headwinds Millennials have experienced, including the 2008 financial crisis when many were entering the workforce, volatility brought on by the pandemic, and currently some of the highest inflation and mortgage rates in decades.
Boomers and Gen Z both say they need less than $1 million ($999,945 vs. $487,711), though the oldest generation is the least likely to believe money can buy happiness (Boomers, 48%), while Gen X says they need $1,213,759. There are also stark differences between genders: Men say their net worth number is $1,488,327, which is nearly double what women say at $880,950.
In the latest Survey of Consumer Finances, the Federal Reserve revealed that American families saw the biggest surge in wealth on record last year, with median net worth climbing 37% to $192,900 between 2019 and 2022, and the average topping $1 million.
Average net worth by age |
||
|
Age (decade) |
Avg. net worth |
Median net worth |
|
20s |
$90,529 |
$6,847 |
|
30s |
$275,413 |
$37,831 |
|
40s |
$723,419 |
$137,656 |
|
50s |
$1,301,538 |
$307,691 |
|
60s |
$1,635,471 |
$478,274 |
|
70s |
$1,636,000 |
$402,266 |
|
TOTAL |
$1,059,400 |
$260,223 |
Empower Personal Dashboard™ data as of 10/30/23
Median net worth by age. Source: The Fed - Chart: Survey of Consumer Finances, 1989 - 2022
A little goes a long way
Less than 1 in 5 Americans (17%) define financial happiness as reaching a certain net worth. For many, incremental gains can do wonders: $25,000 would increase 42% of Americans’ financial happiness for six months. To a third of people (32%), $15,000 is enough to increase their financial happiness for that same amount of time and 17% of people say it would take just $5,000.
Financial happiness manifests in big and small ways. The majority of Americans say it’s paying bills on time and in full (67%) and living debt-free (65%), while roughly half say it’s the ability to afford small luxuries without guilt (54%) and pay for experiences with people they cherish (53%).
For 2 in 5 Americans, buying or owning a home (45%) is just as much a defining quality of financial happiness as having a good work/life balance (44%), while more than a third say it’s being able to retire when they want (37%). For 1 in 5 Americans, financial happiness means having nice things, which is more important to younger generations than older generations (31% vs. 13%).
Happiness roadblocks
Americans are less content with their financial lives such as their overall wealth (58%) than in other areas, including at work (68%) in their relationships (72%) or at home (80%).
Some 42% feel their standard of living is declining. Two thirds say there’s at least one roadblock holding them back from achieving financial happiness (67%), with the most common hurdles being expenses piling up (31%), debt obligations (26%), an inability to save (23%), and not getting paid enough (23%). One in 10 Americans say it’s because they don’t know how invest (14%) or manage their money (10%).
Three-quarters of spenders and savers experience financial stress (73%) and more than a third (36%) say they’ve lost sleep worrying over money. More than half of Gen Z (56%) and Millennials (51%) say their finances keep them up at night, compared to 37% of Gen X and 20% of Boomers.
For nearly a third of Americans (27%), top financial stressors include talking about money. Nearly a quarter of Americans (23%) get stressed when they go out with people who have different budgets than them. One in 5 Millennials (22%) and Gen Zers (21%) get anxious comparing themselves to others, including scrolling through social media (32% of Gen Z and 20% of Millennials). Overall, younger generations stress most about high housing costs (67% vs. 46%), spiking rent prices (62% vs. 38%), growing debt (57% vs. 48%), job layoffs (53% vs. 26%), and student loan payments (48% vs. 20%).
To help alleviate some of these concerns, 7 in 10 (69%) have made at least one money move to improve their situation: three-quarters of Americans are cutting back on daily expenses (71%), more than two-thirds are delaying large purchases like planning vacation (65%) and switching to cheaper brands (64%), while nearly half (47%) are using some emergency savings to pay for expenses. Nearly 6 in 10 (58%) have cut back on online shopping and started getting their groceries at dollar stores (51%) to help combat rising prices. Just 39% say they’re talking to a financial professional to help ease their money worries.
Key stats:
- A balancing act: 74% of Americans say a better work/life balance would bring them more happiness.
- Inflation issues: Two thirds (67%) say their income isn’t keeping up with inflation
- Time out: If money were no object, two thirds of Americans (64%) would quit their job tomorrow, including 71% of Gen Zers.
- Rethinking retirement: The retirement clock has been pushed back by three years, on average, and five years for those lacking a detailed financial plan.
- Seeking benefits: Salaries and bonuses (59%), healthcare (56%), and 401(k) matching (45%) are of major importance to U.S. workers.
Occupational happiness
For many Americans, work plays an important role in defining a life of financial joy: three-quarters say a better work/life balance would bring them more happiness (74%). Gen Zers are the biggest believers at 79%, compared to just 63% of Boomers. Many Americans say an important factor of financial happiness is having a job they love (65%) and not feeling burned out from working multiple jobs (81%).
A majority (77%) of people across all generations say they work to live rather than live to work and have a clear separation between work and life (74%). Boundary-setting when it comes to office hours is important to 68% of American workers, including 72% of Gen Z and 71% of Millennials. Although Americans say they view work as transactional (75%), it remains a source of stress for many: 48% say they’re more worried about their job than saving for retirement (65% for Gen Z; 57% for Millennials).
The job description for joy
A quarter of people reported switching jobs at least once in the last year (24%), including 45% of Gen Z. They may have been motivated by a cyber stressor: More than half (51%) of young Americans say AI developments make them worried about job stability.
In choosing a company to work for, the top factors job seekers consider are salary ranges and bonuses (87%), healthcare (88%), and 401(k) matches (83%). Two-thirds (67%) of Americans feel their employer has a responsibility to help with financial planning, especially for retirement with 401(k) options.
Some 84% of workers say they choose employers that provide clear career growth opportunities and prioritize the company’s brand reputation including its transparency (87%) and ethical values (78%). Nearly three-quarters (72%) look for cultural norms including less bureaucracy. As flexible work arrangements increase in demand, 69% of people say they prioritize remote work options and other policies like unlimited PTO (78%), and perks such as free lunch (65%).
But Americans still fantasize about taking a different path. Two in 3 (64%) said they would quit their job tomorrow if they weren’t relying on their paycheck and 1 in 5 Americans (22%) define financial happiness as not having to work at all.
Salaries that make each generation smile
Two thirds (67%) say their income isn’t keeping up with inflation and 1 in 4 Americans (23% overall, and 35% of Gen Z) say not getting paid enough is their top roadblock to achieving financial happiness. A third of women share that sentiment (29%) vs. 18% of men. To improve their situation, 55% are seeking alternate income streams (65% of Gen Z; 64% of Millennials) and 42% say they’re asking for a raise at work.
In order to feel happy, Americans say they need an average annual salary of $284,167. By generation, Millennials think they’d need the biggest paycheck at $525,947, over 4 times that of other generations. The other salary ranges are similar: $128,084 for Gen Z, $130,344 for Gen X and $124,165 for Boomers. The salary men say they need to feel happy is twice that of women ($380,564 vs. $182,708).
Financial allies – and (furry) friends
One in 5 Americans say they’ve partnered with a financial professional (21%) or financial services company (18%) to help them with their money goals. When it comes to securing financial happiness, more than half of Americans (56%) say they’re in charge of their own destiny. For those who do seek out allies along their financial journey, 43% turn to their spouse or partner for support, 42% look to their family members for guidance and a quarter rely on their friends. For 26% of Gen Z, pets offer emotional support on the journey to financial happiness.
Retirement (not) ready
With inflation and the cost of living on the rise over the last 12 months, Americans now anticipate retiring three years later, at age 63. Those who have a less detailed financial plan (or no plan at all) don’t expect to clock out until age 70, five years later than planned.
For about 4 in 10 Americans (37%), and exactly half of Gen Xers, retiring by a certain age is the meaning of financial happiness. The majority (84%) are taking steps to reach this target, including putting more money into retirement savings (39%) short-term savings like a high-yield account (31%), and working with a financial advisor (26%). A quarter of savers (25%) are paying off debt more aggressively than they would otherwise and 22% are delaying a major purchase like a car.
Yet, a majority (59%) of Americans — including 67% of Gen Z, 65% of Gen X, 59% of Millennials and 53% of Boomers — say they don’t feel financially ready to retire, and nearly 1 in 5 (16%) say they aren’t preparing for retirement at all.
The majority of Americans are making contributions to a retirement plan (70%). Gen Z is trailing other generations when it comes to retirement savings behaviors — 47% of Gen Zers say they save in a retirement plan, such as a 401(k) or 403(b), compared to 75% of Millennials and 76% of Gen Xers. And yet, Gen Z say they want to retire at age 54, 12 years earlier than Gen Xers, who expect to retire at 66, on average.
Getting to the good life
So how will Americans know when they’ve reached financial happiness? Almost all respondents (87%) say it's achieving financial independence and the ability to withstand unexpected financial expenses. More than 8 in 10 Americans (84%) say it’s being able to financially take care of loved ones and having a clear plan to reach their financial goals (77%) Getting good money advice (63%) ranked even higher than enjoying the finer things in life (51%).
Key stats:
- A coffee a day: 62% of Millennials say they’re willing to spend $7 on coffee because it makes them happy.
- Hooked on happiness: About three fourths of Americans would give up big-ticket purchases like the Super Bowl (76%) or social media (73%) to achieve financial happiness.
- The price is right: More than 3 in 5 Millennials and Gen Zers already shop at the dollar store for groceries and household goods (63%).
- Retirement dreams: The top three activities Americans are most interested in pursuing in retirement are travel (41%), hobbies (35%), and volunteer work (27%).
- Money on the mind: 87% of their top goals for the year ahead are related to money
A return on happiness
Many Americans enjoy treating themselves and say it plays a big factor in moving their happiness meter. A remarkable 96% of people say that making a purchase increases their love for life, while 88% say it comes from experiences. When prioritizing the cost of happiness, 62% of Millennials say they are willing to spend $7 on coffee because it makes them happy. Over three-quarters of Americans (77%) say spending money to socialize with family and friends is worth it.
Financial happiness is so important to Americans that more than half would give up indulgences and comforts such as big-ticket events (76%) and social media (73%) to achieve it. Some 62% say they’d give up working out at the gym to be financially fit. But they do draw the line somewhere — less than a quarter would trade love (23%) to be financially happy.
But for many, the splurge is worth the surge in happiness: Nearly 2 in 5 survey respondents (39%) go out to eat without worrying about the cost because it brings them joy. Valuing the return on happiness over the cost, nearly a third of Americans (31%) treat themselves to travel, followed closely by breaking a sweat at the gym (27%) and ordering their favorite food (25%) from the comfort of their couch.
Younger generations are especially content to spend money on food and travel to spark joy, even if it’s not in the budget. While a majority of Millennials and Gen Zers report having enough of a financial cushion to socialize with friends and family (75%), pay bills on time and in full (69%), and pursue hobbies and interests (59%), nearly half (49%) admit to splurging on premium experiences or luxury items they can’t afford – compared with just 16% of people from older generations.
Glad in the golden years
Americans have big plans for how they will spend their retirement years, the top being traveling the world (41%), taking up a new hobby (35%), and volunteering (27%). Others still have money on the mind: a quarter (24%) of Americans are interested in growing their wealth while in retirement. Others are open to becoming a working retiree by getting a part-time (19%) or full-time job (9%) and interested in keeping their minds active by taking classes (18%) and learning a new language (14%).
Americans may also be thinking differently about generational wealth, and inheritances as they approach their golden years: 67% of survey respondents say they’re focused on the ability to take care of themselves during their own lifetimes more than passing on wealth to future generations, including 75% of Boomers.
Happiest places to retire
Around two-thirds of Americans are interested in relocating during retirement, with the top destinations being near the beach (32%) and in the mountains or countryside (22%). Nearly 1 in 5 Americans (16%) want to move to a less expensive state. Just 8% would be happiest in a retirement community.
Financial resolutions
When it comes to setting goals for the year ahead, 87% of people’s top goals are related to money. Saving for retirement (37%), paying off personal debt (33%), and building an emergency fund (32%), along with eating healthier or working out (48%) and spending more time with family and friends (45%) rise to the top of the list. A quarter say they plan to treat themselves to more day-to-day luxuries in the year ahead. Just 18% of Americans — and 35% of Gen Z — are focused on buying a house in the next year.
Year of actions
When it comes to strategies in the year ahead, around half (51%) of older generations and 35% of younger generations plan to work toward their financial goals by living more frugally. More than 3 in 5 Millennials and Gen Z already shop at the dollar store for groceries and household goods (63%). To help manage their money and stay organized, nearly half of Millennials (49%) ask voice assistants like Alexa or Siri and 67% use cashless apps and digital wallets.
Other plans include:
- A third of Gen Zers plan to switch their job in 2024 and younger generations plan to dial up their earnings by taking on a side gig (27%).
- Just 10% plan to dip into their savings or IRA to stick to their financial resolutions.
- Over a quarter (27%) of Millennials and Gen Z say they’ll get financial advice and make a financial plan to meet their goals compared to 18% of older generations.
The secret to financial happiness: the power of advice & planning
The majority of Americans (73%) say a solid financial plan would bring them happiness, and they would like help to get there: 57% of Americans wish they would have gotten advice sooner.
Nearly half of Americans (45%) say they haven’t gotten the financial advice they need, including 55% of Gen Zers and 57% of Millennials. But those who already have a plan are proof of its power: Americans with a more detailed financial plan are three times as likely as those with a less detailed plan to report greater happiness around financial freedom (75% vs. 24%), their plans to achieve financial goals (78% vs. 23%), and the overall state of their finances, such as their net worth and debt balances (73% vs. 19%).
Americans believe achieving a state of financial happiness would help families build generational wealth (84%) make people healthier (79%), more willing to “pay it forward” (78%) and more creative and productive at work (77%). Three-quarters say it would make society more generous (73%), innovative (71%) and kinder (70%).
*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 August 7 to August 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% confidence level.