Research suggests that while money buys happiness by satisfying basic needs and reducing stress, the "happiest" income often peaks around $75,000 to $120,000 annually in the US, or approximately £35,000+ in the UK. Beyond this threshold,, the happiness boost from additional income diminishes, with emotional well-being leveling off.
This belief is supported by a widely publicized 2010 study led by Daniel Kahneman and his Princeton colleague, Angus Deaton — both winners of the Nobel Prize in Economics — which concluded that happiness only increases with income up to $75,000.
What do studies say about money and happiness? Purdue University found the ideal average income for people worldwide is $95,000 and $105,000 in the U.S. Beyond that, satisfaction with life deteriorates, it said.
The standard finding in existing literature is that higher income predicts greater happiness, but with a declining marginal utility (Dolan et al., 2008; Layard et al., 2008): that is, higher income is most closely associated with happiness among those with the least income and is least closely associated with happiness ...
Despite being in the top 4% of UK earners, only one in 10 people earning £100,000 or more would describe themselves as 'wealthy', while only 1% of the UK population identify as such. High earners also place the threshold for wealth much higher, citing £724,000 as the income it takes to be considered wealthy.
Unhappiness is hill-shaped in age and the average age where the maximum occurs is 49 with or without controls. There is an unhappiness curve. I document hump or hill shapes in age in various measures of unhappiness in many countries including the United States and the United Kingdom.
The 50-40-10 Happiness Model, or "Happiness Pie," proposes that your happiness is determined by 50% genetics, 10% life circumstances (wealth, health, location), and 40% intentional activities and mindset, meaning you have significant control over your well-being through your actions and thoughts, as detailed in research by Sonja Lyubomirsky. It suggests that while some people are naturally predisposed to be happier (genetics) and some life events affect mood (circumstances), deliberate practices like gratitude, kindness, and goal-setting offer the largest area for improving chronic happiness.
The salary a single person needs to live comfortably in all 50 U.S. states—it's over $120,000 in 2 places. Americans earning a regular salary may have trouble living comfortably in all 50 states.
Jobs with the highest satisfaction include real estate agents, firefighters, clergy, and radiation therapists. Physicians, software developers, and construction managers can expect high pay and high satisfaction, while educators and tech workers can expect more autonomy and work-life balance.
What Is the Number One Predictor of Happiness? The Harvard study, having spanned over 80 years and multiple generations, clearly recognizes good relationships as the most significant predictor of overall happiness, life satisfaction, and wellbeing (Waldinger & Schulz, 2023).
They also found that happiness across lifespan exists on a spectrum of valleys and peaks over time: Satisfaction with life declines between ages nine and 16, rises to reach its peak at age 70, then declines again until age 96 (the oldest age recorded in the study).
Emotional well-being (experiential happiness) plateaued at around $75,000 per year, suggesting that beyond this point, higher income did not significantly improve daily happiness. With inflation, we're talking about $100,000-$110,000 in 2025 dollars.
Happy people are committed to making time for and enjoying friends and family. They have people they count on and trust. They are more likely to get married and less likely to get divorced. They get along with others, and they tend to volunteer and donate more, which is good for society.
Their study revealed that, on average, higher incomes are indeed linked to greater happiness. However, for a subset of unhappy individuals, happiness rose sharply with income up to $100,000, then leveled off. For others, happiness continued to rise, and for the happiest group, it even accelerated beyond $100,000.
The habit is based on insight Gawdat learned from Harvard-trained neuroscientist Jill Bolte Taylor, who found that it takes only 90 seconds for stress and anger hormones, like cortisol and adrenaline, to be flushed out of the body.
The observed age pattern for daily stress was remarkably strong: stress was relatively high from age 20 through 50, followed by a precipitous decline through age 70 and beyond.
A huge research study concluded that in developed countries, people start having decreasing levels of happiness starting at age 18. It continues in their 20s and 30s before reaching an unhappiness peak — or bottoming out, if you prefer — at the precise age of 47.2.
There are a lot of different reasons why you might feel like nothing makes you happy. Certain mental health conditions like depression, anxiety, and PTSD can cause severe feelings of unhappiness, lack of motivation, and disinterest in activities that used to bring joy.
The median household income in the U.S. is around $83,730, according to the U.S. Census Bureau. But how people define “upper class” differs. Some say you'd need to be making twice the median income, or around $167,460. Even more elite are those who find themselves in the top 5 percent of earners.
To be in the top 1% of UK earners, you generally need a pre-tax income of around £174,000 to over £200,000 annually, though figures vary slightly by source and year, with some estimates placing the threshold at £216,000 for recent tax years, reflecting significant wealth concentration, particularly in London.
