How Much Do You Have to Earn to Be Happy?

Money may not be able to buy you love, as the song says, but you might be able to purchase some happiness for the right price. How much that might cost varies based on your generation, a new survey finds.

The financial investing and advice firm Empower in August conducted a nationally representative survey of 2,034 people age 18 and older to find out how money affects their happiness. When asked what their annual salary would have to be for them to feel happy, boomers said the number was $124,165. Gen Xers set the number at $130,344 and Gen Z opted for $128,084. 

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But for millennials, born between 1981 and 1996, the bar for salary satisfaction is roughly four times higher. Members of that generation, who are in their prime years for buying homes, starting families and paying student loan debt, said they would need to earn $525,947 annually to feel happy.  

According to the latest U.S. Bureau of Labor Statistics salary data, the typical full-time worker earns $58,136 a year. That means — except for millennials — most Americans are making less than half as much as they would like. 

“Every generation has grappled with questions of how to calculate financial happiness [through] hard work, a lot of planning, consistent savings and even a little bit of luck, in just the right measures,” says Carol Waddell, president of Empower.

Here are some other key takeaways from the survey:

The more you earn now, the more it will take to make you happier

Respondents who were earning less than $150,000 per year said it would take a salary increase of $20,000 to make them feel happier. But the respondents earning $150,000 to $200,000 now said they would need a roughly $50,000 raise to feel happier. For those earning more than $250,000 now, it would take a nearly $100,000 raise to boost their mood.

A short-term financial boost can make a big difference

For 17 percent of respondents, a one-time financial gain of $5,000 would make them happier for the next six months. If the amount is $15,000, the number of satisfied respondents grows to 32 percent, and $25,000 would make 42 percent of respondents happier for six months.

Everyone expects to retire later because of inflation

Price hikes in recent years are forcing people to rethink their retirement dates. A year ago, the boomers in the survey said they were planning to retire at age 68, but now they plan to work until 71. Gen Xers said they now expect to retire at 66 rather than 63. Millennials surveyed said they expect to work four additional years, changing their planned retirement age from 56 to 60. And Gen Z respondents said they now expect to retire at the age of 54 rather than 49.