The American Dream's Estimated Lifetime Cost Soars to $3.45 Million
Investopedia's analysis reveals that the American Dream now comes with a hefty price tag, with an estimated lifetime cost of $3,455,305. This comprehensive estimate encompasses various aspects of life, including marriage, raising two children, owning a home, healthcare, cars, education, and retirement. The breakdown of costs for key components is as follows:
Weddings, Kids, and College Tuition: The average cost of a wedding and engagement ring is approximately $35,800. Raising two children to the age of 18 is estimated to cost over half a million dollars, specifically $576,896. If these children attend college, the average tuition (including room and board) for two kids at an in-state, four-year school is around $42,070.
Pets: For households with furry companions, the lifetime cost for a dog and a cat, each living for 15 years, could reach up to $67,000.
Home and Car: Owning a home, a cornerstone of the American Dream, now comes with a lifetime cost of about $796,998, including a mortgage with a 10% down payment and a 30-year fixed rate of 7.2%. Additionally, the lifetime cost of buying cars for the family, with ten purchases of six-year-old used cars every six years, is estimated at $271,330.
Retirement: Planning for retirement involves accumulating savings, and Investopedia suggests that individuals aiming to live off 80% of their pre-retirement annual income need to save at least $715,968.
Though illustrative, the American Dream's cost reflects a broader reality where rising expenses can make these traditional milestones increasingly challenging for many Americans to achieve. The analysis serves as a reminder of the financial implications of pursuing these societal expectations and aspirations.