‘Just a little bit more’: Here’s how much money it takes to be ‘happy’ in America — do you actually have more than enough?

How to arrive at your number

Though Empower’s study gets into the weeds, any set dollar figure remains approximate, at best, because everyone’s retirement plan is different.

While $1 million in savings was once considered a prime target as recently as a few years ago, the magic number is now closer to $1.46 million. So says Northwestern Mutual in its 2024 Planning and Progress Study, which surveyed more than 4,600 people. Interestingly, the magic number was $951,000 just in 2020, meaning this year’s number marks a 53% jump.

What’s of more concern for many, however, is how to track your own happiness target. This number partly reflects a matter of feeling because so much depends on your life choices and how they will impact your serenity and contentment in your golden years.

If you’re curious, Fidelity Investments uses the guideline that in order to retire comfortably, you have to save the equivalent of your salary by 30 and step up by increments to ten times your salary by age 67.

Or you could just pick a goal that feels right. The savings calculator at Investor.gov allows you to enter that goal, your initial investment, years to grow your savings, estimated annual interest or return rate and how often it compounds.

Let’s say you want to reach a $1 million goal with an initial investment of $10,000. You have 30 years to grow it at an annual return of 10% — the S&P 500 historical average — according to the Official Data Foundation. Investor.gov calculates that if compounded annually, you’d need to invest just $418.20 a month to get there.

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Three ways to bolster retirement finances and happiness

Social science research backs up the contention that money does buy happiness. Yet there’s also the example of America’s first billionaire John D. Rockefeller, whose last name became a nickname for a tycoon. Asked how much wealth would make him happy he famously replied, “Just a little bit more.”

You can beat out any Rockefeller by making your retirement money work towards joy. Here are three ways to do it:

Hop off the hedonic treadmill. The term refers to the notion that no matter how much you buy, the new car smell will wear off and you’ll always need “just a little bit more”. Shopping out of boredom or loneliness is all too popular a retiree pastime. Substitute retail therapy with activities such as reading, learning new skills or tapping into your creative juices: the very definition of a happy retirement, according to the nonprofit Acts Retirement-Life Communities).

Practice smart spending. Retirement gives you a chance to downsize in sensible ways that can lower your utilities and pare down your possessions, AARP says. The changes are often painless and if you lived frugally before retirement, it’s almost a matter of muscle memory to keep the good habits going.

Continue to invest. As the Investor.gov calculator illustrates, the more money you dedicate to a healthy return, the more you’ll have in your golden years. Billionaire Warren Buffet sings the praises of index funds tied to the S&P, and a 10% annual return will work its magic if you continue to invest past your projected retirement date.