Midlife Blues? It Gets Better
Happiness tends to hit a low around age 50, but then rises
Unless you happen to be a psychologist or economist, you likely have missed a roiling debate on whether our personal level of life satisfaction changes as we age. Psychologists suggest age doesn’t play much of a factor. Economists who study happiness surveys see it quite differently: Happiness is a U-shaped curve that is high in our early 20s, then falls through our 40s, hits bottom around 50 or so and then starts rising again.
A new research paper takes a deep dive into the debate, and suggests the research that psychologists rely on is based on studies that are too small and that incorrectly read the data. The researchers conclude that our sense of well-being is very much a U-shaped curve that plays out as we age.
If you’re middle-aged, and feeling less than happy about life, wouldn’t that be nice, knowing that sweeter times are ahead?
Full disclosure: The researchers are an economist and a public policy wonk who have published prior work that makes a case for the U-shaped curve. But their conclusion is in line with other research. Among the previous work, a team of three behavioral psychology academics and an economist (subsequently awarded a Nobel Prize) pored over well-being data Gallup compiled from interviews with more than 340,000 individuals between the ages of 18 and 85. In that study, happiness and enjoyment followed an age-based U-curve, with both hitting bottom in the 5Os.
Separately measured, stress and anger follow different patterns, but both decline from highs in our 20s through old age. (Sadness was the only studied well-being emotion that did not follow an age-based pattern.)
Seen through a personal finance lens, the notion that we might not be at our happiest as we hit the big 5-0 makes plenty of sense. In our 30s and 40s, it’s common to take on big-ticket expenses. Raising a family. Buying a home. Potentially, you might also still be paying off student loans. As we glide into our 60s, chances are the kids are out the door and self-sufficient, the mortgage may be paid off (or close to). Moreover, if you started saving for retirement in your 20s or 30s, by 60 that nest egg is a lot bigger than it was at, say, 35.
That said, the odds of experiencing a happiness uptick as you make your way through your 50s and beyond will likely be impacted by how well you navigate certain financial choices in your late 40s and early 50s.
College can make or break your financial well-being. Taking on debt to send your kid(s) to college is especially costly if it means you slow down or suspend your retirement saving. A better approach is to focus on schools where your household’s net price (what you pay after all aid is factored in) will be low enough that you don’t need to borrow. If there’s any shortfall, it is far better for the kid to take out federal student loans, which have lower interest rates than loans for parents.
You also want to be careful in how you approach refinancing a mortgage when you are in your 40s and 50s. Sure, as interest rates have gone from low to lower for more than a decade — and your home equity has likely improved — refinancing can help lower current monthly expenses. But if you take out a new 30-year mortgage, you’ve extended repayment into your retirement years. In 1990, 24% of homeowners between the ages of 65 to 79 had a mortgage. In 2016 nearly half still had a mortgage. If your plan is to stay put in the house rather than downsize, are you sure you can comfortably manage those payments on retirement income? Having a retirement plan for heading into your later years without worries about paying the bills would seem to be an important happiness lever.
Beyond finances, age also brings valuable perspective that impacts our sense of well-being. Separate research recently published found that as we age we naturally get better at practicing mindfulness that makes us less judgmental and more flexible in how we see our world. Among more than 600 study participants between the ages of 18 and 86, the ability to practice kinder perspective-taking kicks in around age 40. And right now, perspective is an especially valuable trait.