The cost of the "American dream" in 2024: $4.4 million

The rising cost of living is making the "American dream" increasingly difficult to achieve today, according to an Investopedia analysis, picked up by visualcapitalist.com, which highlights that while pandemic-driven wage growth has boosted real incomes, it has come after five decades of limited wage increases. At the same time, housing prices have risen, indicating tight supply, with home construction down 55% from 2006. Together, these economic realities are being felt even by those on competitive wages.

The quoted source shows the estimated cost of the "American dream" per household, during its lifetime, and it amounts to a total of 4.4 million dollars, exceeding the average lifetime salaries of both men ($3.3 million) and and of women ($2.4 million) with a bachelor's degree.

Calculating each aspect of the "American Dream" in 2024 by its lifetime cost, we note that the most expensive is paying for a comfortable retirement. This requires nearly $1.6 million in savings, assuming an annual withdrawal rate of 4% and average inflation of 2.5% per year. The savings in this sense are calculated for a minimum pension period of 20 years. According to the cited source, the decline in private pension schemes has played a major role in making financial security in later years more difficult to achieve compared to previous generations.

Not surprisingly, owning a home is the second biggest expense: $930,000 for an existing single-family home (assuming a 30-year mortgage with 20% down). With the cost of housing prices rising, 77 percent of U.S. households will not be able to afford a median-priced home in 2024, according to the analysis.

With America's fertility rates at historic lows, raising two children and sending them to college would cost a total of $832,000. Today, 36 percent of Americans under 50 who do not have children cite affordability concerns as a major reason for not having children. In addition, average college tuition costs have risen 748% since 1963, after adjusting for inflation. Following a similar trend, wedding costs have skyrocketed. Between 2019 and 2023, average costs rose by $4,000 amid inflationary pressures and pandemic backlogs. Today, it costs over $44,000, including the ceremony, reception and engagement ring.

Owning a car costs $811,440 (without maintenance and fuel), according to Investopedia, which also shows that a pet "costs" $36,626 (expenses for owning a dog and a cat). Annual leave requires $179,109 (annual leave from age 22 to 84), and funeral - $8,453.