The Cost of the American Dream
The pursuit of the "American Dream" comes with a hefty price tag, amounting to approximately $3.4 million over a lifetime, according to a recent analysis conducted by financial site Investopedia.
In contrast, research from Georgetown University reveals that the median lifetime earnings for the average American worker amount to $1.7 million.
These figures shed light on the financial challenges faced by many families striving to achieve a middle-class lifestyle, as expenses such as child care, college tuition, and homeownership continue to rise.
The Investopedia analysis takes into account the average costs associated with various aspects traditionally linked to the American Dream, such as owning a home and raising two children until they reach the age of 18.
Another analysis conducted by USA Today indicates that funding the American Dream costs around $130,000 per year for a family of four. This is significantly higher than the median household income of approximately $74,450, as reported by the Census Bureau.
While the Investopedia analysis considers certain expenses that could potentially be shared by both parents in a dual-income household, such as college tuition and family healthcare costs, the financial burden of meeting basic needs highlights the difficulties faced by single-earner households in comparison to those with two working adults.
Single-Earner Households and the American Dream
According to a study conducted by Pew Research Center, single-earner households are more likely to be poor compared to families with multiple job holders. The study also revealed that these single-earner households are more likely to have experienced a decline in income between 1971 and 2021.
However, there are certain groups that still have the means to afford a middle-class lifestyle. Individuals with doctoral or professional academic degrees, such as MBAs, are reported to earn $3.3 million and $3.6 million respectively, according to Georgetown's figures.
Investopedia estimates the following expenses associated with achieving the American Dream. Please note that these costs may vary depending on individual family goals:
- Hospital birth, average out-of-pocket costs for people with health care: $5,708
- Wedding and engagement ring: $35,800
- Raising two children to 18 years old: $576,896
- 10 car purchases over a lifetime: $271,330
- One year of college for two kids: $42,080
- Average cost to buy a home, including lifetime mortgage payments: $796,998
- Pets: $67,935
- Health insurance from ages 26-65: $934,752
- Retirement: $715,958
- Funeral costs: $7,848
