A common belief is that happiness is correlated with income, but only up to a certain level. However, a study by social scientist Dimiter Toshkov suggests that happiness keeps rising with income, even at the highest income levels. The same study also shows that, for a given income level, older people are slightly happier than their younger counterparts.
Mr. Toshkov’s study, published in 2021, was based on the European Social Survey and included responses from 49,519 Europeans in 29 European countries, mainly in 2018 and 2019. Happiness was self-reported on a scale of 0 to 10.
The basic finding is that happiness is highly linked to income level, all the way from the first income decile – the poorest 10 per cent – up to the 10th income decile, the wealthiest 10 per cent.
The message for anyone nearing retirement age is to keep on saving and possibly to save more than you planned. It just might increase your chances of being happy in retirement.
Frederick Vettese is former chief actuary of Morneau Shepell and author of the PERC retirement calculator (perc-pro.ca)
