Today, many people find it harder than ever to reach the American dream, which often includes owning a home, raising a family, and having a comfortable retirement. One major reason for this struggle is the rising cost of living. While wages increased during the pandemic, they were coming off a long period where paychecks didn’t grow much for about 50 years. At the same time, housing prices have shot up, making it even tougher for people to get ahead.
A Deeper Look at the Numbers
A recent graphic from Visual Capitalist, created by Dorothy Neufeld, highlights the staggering cost of achieving the American dream over a lifetime. According to an analysis from Investopedia, the total cost comes to a whopping $4.4 million. To put this into perspective, this amount is actually higher than what the average man (who earns about $3.3 million) or woman (who earns about $2.4 million) makes in their lifetime if they have a Bachelor’s degree.
Let’s break down where this money goes:
- Retirement Costs: The biggest chunk of money—around $1.6 million—is needed to retire comfortably. This is based on the idea that you’ll withdraw 4% of your savings each year and that prices will rise by about 2.5% annually. Unfortunately, fewer people today have private pension plans, which makes saving for retirement more challenging than it was for earlier generations.
- Buying a Home: Coming in second is the cost of owning a home, which averages about $930,000 for a typical single-family house. In 2024, a shocking 77% of American households can’t afford a median-priced home due to skyrocketing prices. With construction rates falling significantly—down 55% from 2006—finding affordable housing has become an uphill battle.
- Raising Children: If you plan to have kids, be ready to spend about $832,000 over their lifetime. This cost includes raising two children and sending them to college. As fertility rates hit record lows, around 36% of Americans under 50 say that affordability is a major reason they choose not to have children. Additionally, college tuition has risen dramatically—up 748% since 1963 when adjusted for inflation—making it harder for families to plan for their children’s futures.
- Weddings: Finally, saying “I do” comes with its own hefty price tag. Between 2019 and 2023, wedding costs increased by $4,000 due to inflation and delays caused by the pandemic. Now, couples can expect to spend over $44,000 on the entire wedding experience, including the ceremony, reception, and engagement ring.
A Changing Landscape
As these numbers show, the American dream is becoming more expensive and difficult to achieve for many. The combination of rising housing prices, the high cost of raising children, and the challenge of saving for retirement means that more people are struggling to secure their future. This reality begs the question: Is the American dream still within reach, or is it slipping further away?
