Half a million dollars can buy a lot of things—but it’s not clear happiness is one of them
Can money buy happiness? Only to a certain point.
March 09, 2023 2:45 PM EST
New study finds that happiness in relation to money plateaus around $500,000 a year. LeoPatrizi—Getty Images
It’s either something about leaving your 20s and gingerly stepping into what inevitably seems to be the rest of your life (or the idea of “late capitalism”), but there’s a question I, my partner, and our millennial friends return to over and over: When is enough enough?
When is it enough stuff? When is it enough nights out and trips taken? When is it enough money? What is enough?
Apparently, enough is somewhere in the realm of $500,000.
A new study from a group of scientistsfound that the limit in terms of whether money can buy happiness starts to max out once someone hits $500,000 a year. It’s a far cry from past research, in which one study established the idea that happiness plateaus after $75,000.
The study, which surveyed 33,391 working U.S. adults, is presented as an “adversarial collaboration.” In 2010, psychologist Daniel Kahneman and economist Angus Deaton published a paper in which they asserted that emotional well-being, or happiness, increases along with income until the point where it starts to level out, or plateau, when the person makes between $60,000 and $90,000.
In contrast, a 2021 study by Harvard doctoral student Matthew Killingsworth researching the same idea, found no real financial plateau to happiness.
The new paper, published by Kahneman, Killingsworth, and psychologist Barbara Mellers, finds that the plateau exists among the unhappiest 20% of people once they start earning more than $100,000. That, the paper says, is the point at which remaining miseries—bereavement, clinical depression, heartbreak, etc.—aren’t alleviated by more money.
For other Americans, however, higher levels of happiness did seemingly equate to making more money. For the happiest 30%, the level to which their happiness increased continues beyond $100,000. And though the study included people who earned more than $500,000, researchers said discerning whether the same effect was present for people earning that amount was impossible to say for sure.
“For very poor people, money clearly helps a lot,” Killingsworth told New Scientist. “But if you have a decent income and you’re still miserable, the source of your misery probably isn’t something money can fix.”
The median American yearly income sits just above $54,000, and only about 17% of Americans earn more than $100,000 a year, according to research from First Republic. What’s more, people making $500,000 a year are considered to be among the top 1% of earners in America.
The researchers say that in truth, the idea that money can be enough to make someone happy is unfounded. They found, in fact, the emotional impact of more money was small compared to something as simple as the weekend.
“The correlation between income and well-being is much discussed, both by the public and by social scientists and has been the focus of considerable research,” the paper reads. “Yet it’s important to note that the relationship is weak, even if statistically robust.”
