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.
26 November 2023, 02:10 GMT
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.