A new study from a group of scientists found that the maximum amount of money someone can earn in a year before their happiness plateaus is $500,000. However, the study also revealed that once someone reaches a yearly income of $75,000, their happiness levels no longer increase significantly.
In 2010, psychologist Daniel Kahneman and economist Angus Deaton published a paper presenting a study on the emotional well-being or happiness of working U.S. Adults. The study, which surveyed 33,391 individuals, found that as income increases from $60,000 to $90,000, emotional well-being also increases until it reaches a point where it levels out or remains constant. Kahneman and Deaton describe this collaboration as “adversarial.”
In contrast, a 2021 study by Harvard doctoral student Matthew Killingsworth researching the same idea, found no real financial plateau to happiness.
According to a new paper published by psychologists Barbara Mellers and Daniel Kahneman, once people start earning more than $100,000, they find themselves among the unhappiest 20%. The paper suggests that although money can alleviate certain miseries such as heartbreak, depression, and clinical bereavement, there are other remaining hardships that are not eased by increased wealth.
The researchers stated that it was difficult to determine with certainty whether the same impact existed for individuals earning that quantity. Additionally, the study encompassed individuals who earned over $500,000, and the extent to which their contentment increased extended beyond $100,000 for the top 30% of the happiest individuals. Nonetheless, it appears that higher levels of happiness did correspond to higher income for other Americans.
Killingsworth told New Scientist, “Money clearly helps a lot for very poor people. If you have a decent income, it probably isn’t the source of your misery, but you’re still miserable and something can fix it.”
Based on a study conducted by First Republic, the average annual income for Americans stands slightly above $54,000, with only approximately 17% of individuals earning over $100,000 per annum. Additionally, within the highest 1% of income earners in the United States, there exist individuals who make $500,000 annually.
The minimal psychological effect of additional funds was insignificant in contrast to something as basic as the weekend; indeed, the scientists claim that the notion that money alone can bring true happiness lacks support.