Achieving the American Dream has evolved into a costly endeavor, demanding an estimated $3,455,305 throughout one's lifetime, an Investopedia study reveals
Once a symbol of improving one’s socioeconomic status and financial prosperity, the concept of living the good life, which encompasses marriage, having children, owning a house, and education, has grown increasingly out of reach.
So, the journey begins with marriage, which, based on 2022 data from The Knot, has an average price tag of $35,800 and includes a wedding and engagement ring.
Becoming a homeowner through a mortgage with a 10 percent down payment and a 30-year fixed loan at 7.2 percent interest (excluding taxes, origination, and lender charges) averages around $796,998, according to figures provided by Zillow, the Consumer Financial Protection Bureau (CFPB), the Federal Reserve Bank of St. Louis, September 2023 purchase price and rates.
The costs escalate with the arrival of children. The out-of-pocket cost for birthing two children in a hospital, assuming coverage under a large group health plan, averages $5,708. Raising two children to adulthood incurs an estimated cost of $576,896, adjusted for 2022 inflation, per a USDA report. College education for these children adds an average annual expense of roughly $42,000.
Healthcare emerges as a significant financial burden, with lifetime premium outlay for an average family health plan peaking at $934,752, according to a 2022 Peterson-KFF survey.
Transportation expenses contribute further strain, with the total lifetime cost of owning a car amounting to about $271,330, factoring in the purchase of used vehicles every six years.
Pet care also demands attention, considering the total cost of caring for a dog and a cat throughout their 15-year lifespans, which ranges from $34,948 to $100,922, based on a 2022 Synchrony study.
Planning for retirement requires substantial savings. Roughly $715,968 is the projected amount retirees need to preserve 80 percent of their pre-retirement income, as determined by median household income metrics and life expectancy rates from the Centers for Disease Control (CDC).
Even in death, expenses persist, with the average cost for a traditional viewing and burial funeral service standing at $7,848, according to figures from Policygenius in 2023.
"While everyone's idea of the so-called ‘American Dream’ is unique, the rising cost of everything a family might reasonably want and need to afford, like health insurance, owning a vehicle, buying a home, raising children, and sending them to college, continues to put that dream further out of reach for most households," Caleb Silver, editor-in-chief of Investopedia, told news sources.
Harsh reality, meanwhile, clashes with this aspiration: on average, Americans from various educational backgrounds earn approximately $2.3 million throughout their lifetime, according to findings from the Georgetown University Center on Education and the Workforce.