New study compares wealth between millennials and baby boomers

Does happiness have a price? For a majority of Americans, the answer is yes — but it it doesn't come cheap. 

About 6 in 10 of Americans believe money can buy happiness, according to a new poll from financial services firm Empower. Yet to achieve happiness through financial means, most people say they'd need a significant raise, as well as a big chunk of money in the bank. 

Median household income in the U.S. stands at about $74,000 annually, but respondents told Empower that they'd need to earn roughly $284,000 each year to achieve happiness. 

And as for wealth, Americans said they'd need even more in the bank to feel content: $1.2 million, to be exact, the poll found. Many people are wealthier than they were a few years ago, thanks to the rise in real estate and stock market values, yet the median net worth of U.S. households stood at $192,900 in 2022, according to the Federal Reserve.

The findings come at a time when Americans are feeling more stressed by money, partly due to the impact of inflation, which has been elevated for more than a year. Workers, meanwhile, aren't likely to receive the type of raises next year that could put them anywhere near the $284,000 mark, given that the average raise will be about 3.9% in 2024, according to consulting firm Mercer.

Most generations said they believed earning a low six-figure income would bring them happiness, with the notable exception of millennials, who said they would need to earn more than half a million a year to feel joy. 

Millennials may have higher financial aspirations because they've experienced significant headwinds in their adult lives, including the Great Recession, when many were entering the workforce, as well as struggles to get a foothold in the housing market amid high mortgage rates and housing costs, Empower said.

About 7 in 10 Americans said that having more money would solve most of their problems, according to the study, which was conducted by The Harris Poll. The group surveyed more than 2,000 American adults between August 7 to August 14, 2023. 

Can money buy happiness?

The findings add to research about the intersection of finance and happiness — and may add ammunition to the debate over whether money can buy contentment. 

Earlier this year, Nobel Prize-winning economist Daniel Kahneman and fellow researchers dug into the question after earlier academic research had concluded that money could only boost happiness up to a certain point, at about $75,000 in annual income. 

The new study from Princeton University's Kahneman found that money actually delivers a continual return on investment — up to earnings of $500,000 per year. Beyond that figure, he and his other researchers concluded, money had little impact.

For many Americans, being happy isn't only about achieving a particular net worth, Empower's research found.

According to the survey, 67% of respondents said being able to pay their bills on time would increase their happiness. In addition, more than half of the poll's participants said having no debt and being able to afford luxurious items without worry would boost their moods, while 45% believe owning a home would make them happier. 

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Elizabeth Napolitano

Elizabeth Napolitano is a freelance reporter at CBS MoneyWatch, where she covers business and technology news. She also writes for CoinDesk. Before joining CBS, she interned at NBC News' BizTech Unit and worked on the Associated Press' web scraping team.