3 minute read

Conventional wisdom dictates that happiness comes when we have fewer stresses in our lives. And what makes a lot of stress go away? Money. But research proves time and again, this state of mind isn’t necessarily achieved by your higher socioeconomic status. In fact, reported happiness peaks around incomes ranging between $100,000 to $125,000, where people are 12 times more likely to report being happy than unhappy (2021 CivicScience). Even academics continue to debate at what income level you will experience a well-being plateau (2020 Wharton). So, if money is not a clear driver of happiness, what is?

Purposeful and Connected

For over eight decades, the longest study of happiness conducted by the Harvard Study of Adult Development seeks to answer, “what makes a happy and meaningful life?” This one-of-a-kind real-life window found key elements that help people thrive:

  • Connections foster better physical health and greater emotional well being
  • Finding meaning and purpose is critical for human flourishing
  • Understanding life stages brings greater perspective and wisdom
  • Strategies for caring reduces stress, fosters wellbeing & facilitates adaptation for change

This last point also connects to the age-old concept, “your health is your wealth.” Stress is known as the silent killer and can cause both mental and physical illness. Those who report being very healthy are 11 times more likely to say they’re happy than unhappy, so getting exercise and eating well are important steps to helping improve your happiness (2021 CivicScience). And at no other time will this be as important than when you get older and enter your retirement phase of life.

In the latest research by the Alliance and HerMoney, when women were asked what stresses them out the most about money, one third say competing financial priorities. However, once women pass age 55, their top concern becomes not having enough saved.

A Retirement Prescription for “Happy”

Retirement can be a game changer when it comes to happiness. Many of the things that usually contribute to stress – raising children, striving for career success – are typically over. As people get older, they also get better at regulating their emotional health (2007 Stanford Center for Longevity). Planning your new purpose can help you be happy in retirement. Understand that finding purpose shouldn’t necessarily conjure images of having to sit on a mountaintop contemplating your life. Purpose can be as simple as what gets you up in the morning and why. This is also a time to review your goals for the next chapter in life. Just remember – be sure you are retiring to something vs retiring from something and to figure out how much money you’ll need to do that, while keeping an eye on your expenses. Ignoring your “Money Happiness Formula” I > E (i.e., income GREATER than expenses) puts you at risk of being unhappy and possibly underfunded for your lifestyle. Perhaps this is why research continues to show that the majority of investors value the protection of lifetime income (2021 Protected Retirement Income and Planning Study). Who doesn’t like a “check in the mail” each month after they stop working, especially one that can help cover your basic expenses?!


Steve Vernon, President of Rest-of-Life Communications, joined Jean Chatzky on Your Money Map to discuss money and happiness on May 6, 2022.

Happiness To Dos:

  • Build and maintain your social connections. Isolation is fatal, and loneliness is a curable epidemic
  • Choose activities and people that align with your purpose and values
  • Exercise regularly. Tennis can add over nine years to your life! (2018 Mayo Clinic)

Steve Vernon is president of Rest-of-Life Communications, where he uses his actuarial expertise and experience to help with the most challenging retirement planning issues facing older workers and retirees today, including finance, health, and lifestyle. Previously, he worked for over 35 years as a consulting actuary, helping Fortune 1000 companies design, manage and communicate their retirement programs. He has written a regular blog column for CBS MoneyWatch, titled Money for Life, and currently writes for His latest book is Don’t Go Broke in Retirement: A Simple Plan to Build Lifetime Retirement Income.

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