Chasing the ‘American dream’ now comes with a shocking $4.4 million price tag

The “American dream” is slipping further and further away for millions of people across the country, as rising costs, stagnant wages, and widening wealth gaps make it increasingly difficult to achieve financial stability. The latest estimated price tag on the American dream now sits at a whopping $4.4 million, according to Investopedia, which factored in lifetime household costs, common major life milestones — such as homeownership, weddings, kids, and pets — and retirement savings. That’s more than $1 million above what most Americans will earn in a lifetime. For more context, even the wealthiest 10% of U.S. households have a median net worth of roughly $3.8 million, according to the Federal Reserve’s 2022 Survey of Consumer Finances. By comparison, the median net worth of Black households is $45,000, and $62,000 for Hispanic households. The median net worth of white households comes in at $285,000. With the rising cost of living, achieving financial milestones can feel more challenging than ever. So, is the American dream just a pipe dream at this point?

The cost of a house with a white picket fence

The cornerstone of the American dream has long been the ambition to save for one of the biggest common milestones — buying a home. However, in 2024, the path to homeownership is a steep one, with the average cost reaching $929,955 for a single family home — assuming a 30-year mortgage and a 20% down payment, according to Investopedia. This figure doesn’t account for other expenses related to the home, such as emergency repairs, any HOA fees, utilities, and insurance, among other additional costs. These high costs are creating significant barriers for potential first-time homebuyers, forcing many to postpone, or completely abandon, their plans — with factors such as rising interest rates, limited housing supply, and inflation impacting affordability. As a result, the national homeownership rate in the U.S. stood at 65.6% during the second quarter of 2024, according to the U.S. Census Bureau.

The dream of starting a family

These days, planning a wedding or eventually starting a family comes with hefty price tags. Zola, an online wedding registry and planner, reports that the average cost of a wedding in the U.S. jumped by 14% in 2024, bringing the total to around $33,000. For those considering parenthood, the financial commitment runs even deeper. The aforementioned 2024 Investopedia study shows that raising two children from birth through age 17, including the costs of a public four-year college, could skyrocket to nearly $832,172. Even excluding college, parents are still looking at an estimated $612,000 in expenses to raise two kids until they hit the age of 18. This also doesn’t take into account the fact that 59% of Americans say they’ve helped their young adult kids out financially in the past year, according to the Pew Research Center. Of that cohort, 36% of parents revealed that, in doing so, it hurt their own financial situations. It’s no wonder that another Pew Research Center study found that more than a third of child-free adults under age 50 cited affordability as the main reason they never started a family.

Easing into your golden years

Everyone dreams of a sizable nest egg for retirement, and if you’re planning for a roughly 20-year timeline for those golden years, those shored up savings should sit at around $1.6 million. This way, utilizing the 4% rule each year should still comfortably support you, according to Investopedia. However, that’s not exactly the reality for many Americans. Nearly half of U.S. households are projected to fall short of maintaining their current lifestyle by retirement, even if they work until age 65, as highlighted by the National Retirement Risk Index (NRRI). When planning your financial future, it’s wise to consider tax-friendly vehicles such as a 401(k) or an individual retirement account (IRA). These accounts allow your savings to grow while easing tax burdens, giving your money the chance to work for you over time. If mapping out these retirement goals feels daunting, consulting a financial adviser could be the first step toward living out your version of the American dream — with or without the white picket fence.