Retire Happy With This Much Money "Money has never made man happy, nor will it, there is nothing in its nature to produce happiness," Benjamin Franklin once said. "The more of it one has, the more...

"Money has never made man happy, nor will it, there is nothing in its nature to produce happiness," Benjamin Franklin once said. "The more of it one has, the more one wants."

Financial success might not be the key to happiness. A great deal of research suggests the most important factor for happiness is social connections and relationships. At the same time, being free of financial worries can also contribute to a happier and more fulfilling life.

But, what's the exact dollar amount you need to be happy? Well, there's no exact answer to that question.

How Much Money You Need to Be Happy

The Center for Health and Well-Being at Princeton University calculates this figure at $75,000 per year based on a 2010 study by Nobel Prize-winner Angus Deaton and Daniel Kahneman. The study showed that once you earn $75,000 or more annually, you do not see much improvement in your emotional well-being.

Since the study was conducted back in 2010, inflation has been taken into account. But, it does illustrate that people often don't find a greater sense of happiness by earning more money. As opposed to how much they earned, what was more important was how study participants felt about how they earned extra income. In other words, your attitude toward your accomplishments is important, but how much you love your work makes the difference.

According to Deaton and Kahneman's research, investors should focus on passive income strategies that generate $75,000 annually. The alternative is to ensure you have $75,000 in income every year after you retire by saving for retirement.

An effective investing program will enable you to;

• Get out of debt.
• Ensure that you always have enough money to cover your cost of living.
• Ensure your property and home are adequately insured.
• Diversify your income sources so you won't be at risk if you lose your job or a source of income.

The Price of a Happy Retirement

While we have a basic figure on the price of happiness in general, how much do you need to retire happy with?

An Audley Villages study ranked happiness rankings and how much the average retiree needs to retire comfortably in the world's happiest cities.

Retirement in the world's happiest cities is estimated to cost $288,240 on average. Helsinki, Finland, scored the highest on the "happiness index" and has a retirement cost of approximately $252,599 per year. Wellington, New Zealand, had the least expensive retirement cost at $206,228.

In America, Honolulu was ranked as the happiest city. However, to retire there costs $304,591 per year.

What's the real magic number?

In contrast, research from Wes Moss, an investment advisor and author of "What the Happiest Retirees Know," has found that $500,000 in retirement savings is the magic number. When we first start accumulating money, it has a huge effect on happiness, but then it begins to level off.

"To be truly miserable, a household would have less than approximately $500,000 in savings with a mortgage so far from payoff completion that the single stream of income might as well be a trickle," Moss writes in the Atlanta-Journal Constitution. "It might sound counterintuitive to actively try to save less than $500,000, but it takes that kind of commitment to cognitive dissonance to truly miss the mark."

"Keeping in mind that $500,000 is an important inflection point, set your sights on sadness-by-liquid-net-worth," he adds. Taking this into consideration, make sure to avoid applying the $1,000-a-month rule. For every thousand dollars of monthly retirement income, you need to have saved $240,000 based on a 5% withdrawal rate. "A happy retiree would make sure to double that, leading to a little more than $2,000 per month in retirement."

Conversely, your retirement income and expenditures will fall far short, and you'll struggle to close the gap. It will happen in a stage of life when opportunities are fewer and physical labor is more difficult to perform. It will replace anxiety about the future with anxiety about the present, and you will have unhappiness exactly where you want it," Moss says.

How to Retire Happy

Your savings won't guarantee happiness in your golden years. At the same time, it can help you manage financial stress and achieve your retirement goals. With that in mind, here are four strategies you should be implementing today if you want to retire happy.

1. Don't delay, start saving today.

According to research, people's well-being is boosted through saving money and not just spending it.

"There's a feel-good connection," says Jacquette M. Timmons, a financial behaviorist based in Brooklyn, New York, of the power of saving. "It boosts your confidence that you are prepared for the future."

"Having a financial plan and clear retirement goals can help bring peace of mind and increase feelings of happiness," adds Tom Reid, senior vice president of Group Retirement Services with Sun Life Canada.

Moreover, a study published in the Journal of Economic Psychology found that people surveyed were happier about their financial status as they age. The reason? The authors state that increasing assets and decreasing debt are significant factors leading to financial satisfaction, despite a reduction in income.

If you want to save for retirement, for instance, divide your savings goals into manageable chunks. As a result, you'll form habits easier by taking small steps. Then, once your new habits take hold, go ahead and increase your retirement plan contributions to guarantee that you'll reach your retirement targets.

If you're still struggling with this, I suggest you check out our 101 Unique Ways to Save Money.

2. Pay off your mortgage.

"As the mortgage descends, happiness ascends. In fact, those within five years of repayment are 4 times more likely to be happy," notes Moss. "From a housing cost perspective, HROBs live in nice houses, but not necessarily McMansions." As of 2021, the average price of an HROB home was just under the $600,000 range. If you haven't paid off your mortgage. Make sure you've got the best rates. We've found Chime Bank, Chase and Flagstar Bank to have the best rates.

Tips to pay down your mortgage.

Yes. You can realistically pay down your mortgage in under a decade by doing the following;

• For starters, make sure that you buy a home you can actually afford. Just because you're approved for a specific loan amount doesn't mean you have to use it all.
• Understand discount and origination fees. An interest rate discount results from prepaid interest on a mortgage; the more you pay, the lower the interest rate. The cost of making a loan is covered by the origination fee charged by the lender.
• Pay off your other smaller debts so that you can throw that money towards your mortgage. Generally, it's advised to pay off your interest credit cards first.
• Consider making bi-weekly payments. There are 26 biweekly periods in a year, so the biweekly produces one extra payment on top of the monthly. As a result, the payoff period is significantly shortened.
• Be frugal. Get a budget and see what unnecessary expenses you can cut. Also, make the most of using coupons and waiting to buy certain items when they're on sale.
• Hit the principal early. The more you put into your mortgage over what you can pay back, the smaller the amount you will pay in interest. By making extra payments or paying extra lump sums, you can shorten the length of the loan by many years.
• Got cash? Put it towards your mortgage? Whether it's a tax refund, bonus, raise, inheritance, or gift, put every windfall towards paying down your mortgage debt.
• Refinance your mortgage. If you can, this can either shorten the loan through higher payments or help you obtain a lower interest rate.
• Rent out space. If you have a spare bedroom or unused garage, you can rent these spaces out. That income can pay down your mortgage.

3. What you spend on matters.

I get it. You worked hard and were financially responsible. So, why not enjoy the fruits of your labor?

However, according to Professor of Wealth Management at The American College of Financial Services Michael Finke, buying material goods like cars and clothes will not substantially increase life satisfaction in retirement. Even relocating to your dream home may not pay off. For example, you may eventually become bored with living near the beach.

So, how should you spend your money? Finke has found that spending money on socializing with other people makes retirees the happiest.

4. Have multiple income sources.

National Institute on Retirement Security (NIRS) reports that retirees who have saved three sources of income are among the best equipped for retirement. Despite this, only a small percentage actually do.

Additionally, an analysis from NIRS found that those saving for retirement shouldn't rely on a single source of retirement income alone.

Today, only 6.8% of retirees actually save their income using the most dependable retirement savings method, the "three-legged stool."

• Social security
• Defined benefit plans
• Individual savings, such as a 401(k)

The most stable trio of retirement incomes comes from each leg of the stool. A stool must have three legs in order to be balanced. Therefore, experts state that taking away just one leg makes the entire stool unbalanced.

American efforts to save for retirement continue to be marred by one issue: access to all three sources of retirement income. Most Americans contribute to Social Security, but not every employee has access to a 401(k) or defined benefit plan through his or her employer.

As a result, you may want to explore innovative retirement income streams, such as;

• Funding IRAs as an alternative to 401()ks.
• If you've maxed out your 401(k), purchase an annuity for a guaranteed lifetime income.
• Side hustle or start a retirement-friendly business like mentoring, freelancing, investing in real estate.
• Earn a passive income through blogging or renting out property.
• Build a bond ladder or invest in a high-dividend-paying stock.
• Here are a few other ways to make free money easily and quick.

The secrets to securing a happy retirement.

Money is important. But, it's not everything.

When it comes to retirement finances, make sure your budget matches your lifestyle. Are you able to make ends meet? What is your typical spending on things you like, such as concerts, dining out, and traveling? And, to get a more accurate sense of how much is enough for your retirement, don't forget to take into account the cost of health care.

And, remember that happiness is not about being able to purchase material items or jet-setting on extravagant vacations. It's the small things that make us happy, such as relationships and having a purpose.

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