The estimated cost of achieving the American Dream in 2024 is over $4.4 million. This amount spans life events from early adulthood through retirement.
Financial planning, savings, and strategic budgeting are crucial, as this cost surpasses the average lifetime earnings of men ($3.3 million) and women ($2.4 million) with a Bachelor’s degree.
The American Dream, symbolising personal and financial aspirations, faces significant challenges in 2024. Rising living costs, despite pandemic-led wage growth, have made it harder to achieve.
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This growth followed decades of stagnant wages, while housing prices surged due to limited supply and a 55% drop in home construction since 2006. These economic factors have made it difficult for many to progress, even with competitive salaries.
According to an analysis from Investopedia, Here is a breakdown of the American Dream and its lifetime cost as of 2024
Retirement: $1,599,995
The minimum recommended savings for a 20-year retirement totals nearly $1.6 million. This estimate is based on average living expenses and the need for financial stability after leaving the workforce. Planning for retirement requires consistent saving throughout a person’s working life, considering potential medical costs, daily living expenses, and other unforeseen needs.
Owning a new car: $811,440
Owning a new car throughout adult life adds up to over $800,000. This figure includes car payments but excludes costs like fuel and maintenance. The expense reflects the cumulative payments for vehicles from early adulthood until retirement.
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Wedding: $44,300
The cost of a wedding, including the ceremony, reception, and an engagement ring, amounts to $44,300 on average. This price represents what couples often spend for a modest celebration in 2024. The expense of a wedding continues to be a significant financial commitment for many families.
Raising two children and college: $832,172
Raising two children to age 18, along with covering four years at a public college for each, comes to $832,172. This cost covers daily living expenses, education, healthcare, and other essentials. It does not include private school tuition or any extracurricular activities that might add to a family’s budget.
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Owning a home: $929,955
Purchasing an existing single-family home with a 30-year mortgage, assuming a 20% down payment, results in an average cost of $929,955. The figure factors in principal and interest but does not cover property taxes, insurance, or maintenance.
Pets: $36,626
Owning a dog and a cat comes at a lifetime cost of $36,626. This includes expenses such as food, veterinary care, and routine supplies. While pets are considered part of the family, their ownership adds to the financial burden over time.
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Yearly vacation: $179,109
Taking an annual vacation from the age of 22 until 84 accumulates a total of $179,109. This figure assumes modest travel costs, excluding luxury accommodations and international travel.
Funeral: $8,453
The cost of a funeral, which includes a viewing and burial, totals approximately $8,453. This is often an unexpected expense that family members need to consider when planning finances or taking out insurance.
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