After 25, life's ode to joy wavers

IT'S all downhill from the age of 25. Young people's happiness and satisfaction with life continues to grow throughout their teens and hits a peak when they make the transition from study to work. But by the mid-20s, the joy factor has taken a significant dip and continues heading south until the end of our working lives.

By InvestSMART · 12 Nov 2011

By InvestSMART ·
12 Nov 2011

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The findings are part of the latest government-funded Longitudinal Surveys of Australian Youth report, which measures the link between education, employment and wellbeing.

Data from the Household, Income and Labour Dynamics in Australia (HILDA) report was also incorporated to reach a conclusion most of us already suspected that our best years are behind us.

Almost 4000 people aged between 16 to 25 were asked to rate their satisfaction with life for the survey over the course of 11 years. Generally high levels of happiness with home and social life were reported while the participants were in their late teens and still living at home.

But after the first taste of independence had dulled in the early to mid-20s satisfaction levels decreased and responsibilities grew.

While all this may make depressing reading, there is some consolation in the HILDA report, which shows that life perks up around the age of 65, coinciding with retirement.

So is work to blame for this adult malaise? Thwarted career plans and unmet expectations coupled with mounting financial responsibilities have a lot to do with the 25-year-old tipping point, says Tom Karmel, the managing director of the National Centre for Vocational Education Research, which manages the survey.

"There's evidence to show that those who did apprenticeships tended to be happier than those who went to university," he says.

"We don't know for certain why, but there's the hypothesis that by the mid-20s, a tradesperson is quite well established, but a university graduate is still at the bottom of the career pecking order. They might also have higher expectations and greater awareness and greater awareness doesn't necessarily equate to greater happiness."

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Frequently Asked Questions about this Article…

What did the Longitudinal Surveys of Australian Youth and HILDA report find about young people's happiness?

The government-funded Longitudinal Surveys of Australian Youth, together with data from the HILDA report, found that happiness and life satisfaction grow through the teenage years and peak around the transition from study to work. However, satisfaction falls by the mid-20s and generally declines through the working years before improving again around retirement age.

When does life satisfaction peak and when does it dip according to the report?

According to the surveys, life satisfaction tends to peak when young people move from study into work (late teens to early 20s). It takes a notable dip by the mid-20s and continues to decline through most of the working life, with an upswing around age 65 that coincides with retirement.

How big was the survey sample and how was the data collected?

Almost 4,000 people aged 16 to 25 were asked to rate their life satisfaction over the course of 11 years for the study. The findings combined results from the Longitudinal Surveys of Australian Youth and incorporated data from the Household, Income and Labour Dynamics in Australia (HILDA) report.

What reasons does the article give for the drop in happiness after age 25?

The article highlights factors such as thwarted career plans, unmet expectations and growing financial responsibilities as contributors to the mid-20s drop in satisfaction. Tom Karmel of the National Centre for Vocational Education Research points to these pressures as important drivers of the so-called 25-year tipping point.

Does doing an apprenticeship make a difference to happiness compared with going to university?

The report's managers note evidence that people who completed apprenticeships tended to report higher happiness in their mid-20s than those who went to university. One hypothesis is that tradespeople may be more established in their careers by their mid-20s, whereas university graduates are often still near the bottom of the career ladder and may have higher expectations and greater awareness that doesn't necessarily increase happiness.

What does the HILDA report say about happiness at retirement age?

The HILDA data included in the coverage shows that life satisfaction perks up around age 65, which coincides with retirement. The article frames this as a consolation after lower satisfaction through the working years.

How should everyday investors think about these life-stage wellbeing trends when planning finances?

While the article doesn't give direct financial advice, the findings highlight how career progression, income and mounting responsibilities can affect wellbeing across life stages. Everyday investors might use this insight to factor changing incomes, career timing and retirement expectations into long-term saving, budgeting and investment plans.

Does the article offer tips to counter the mid-20s decline in satisfaction?

The article does not provide specific tips or solutions. It reports the survey findings and expert observations—such as the possible benefits of apprenticeships and the impact of financial and career pressures—without prescribing actions. Readers seeking strategies to improve wellbeing or financial resilience may want to consult financial planners or wellbeing resources for tailored guidance.