The American dream now costs $5 million. Here’s a breakdown.
Is the American dream attainable? The dream is still alive for many people.
Inflation has dimmed the American dream.
It now costs $5 million over a lifetime to fund eight key components of the American dream, including homeownership and raising children, according to a new analysis from Investopedia.
Everyone’s dream is different. But some human wants are universal, as Investopedia found in compiling its September report.
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In an accompanying survey, the financial journalism site asked 1,263 adults to identify goals they associate with the American dream. Most said they shared these eight aspirations:
Retiring in comfort (86%)
Affording quality health care (86%)
Owning a home (85%)
Raising a family (78%)
Owning a new car (72%)
Going on vacation every year (71%)
Caring for pets (66%)
Having a wedding (55%)
The report tabulates the lifetime costs of each goal, tapping data from federal agencies, think tanks and industry groups.
The American dream is getting more expensive.
Here are the lifetime costs of each goal, from largest to smallest:
Retirement: $1.6 million
Owning a home: $957,594
Owning a new car: $900,346
Raising two children and paying for college: $876,092
Health care: $414,208
Annual vacations: $180,621
Pets: $39,381
Wedding: $38,200
Add them up, and you have a lifetime cost of $5,043,323 for achieving the American dream.
That’s a daunting sum, considering the average American with a bachelor’s degree earns about $2.8 million over a career.
The numbers suggest, however, that the dream is getting more expensive. Investopedia found that most components of the American dream cost more in 2025 than in 2024, when the site last tallied costs.
“You’re definitely seeing a rise in prices pretty much across the board, especially for things like homeownership and raising kids and sending them to college,” said Caleb Silver, chief business editor of People Inc. and editor-in-chief of Investopedia.
A lifetime supply of new cars cost $900,346 in 2025, versus $811,440 a year ago, Investopedia found. A lifetime of homeownership costs $957,594, up from $929,955.
Not everyone, however, defines the American dream the same way.
Michael Strain, a senior fellow at the American Enterprise Institute and author of a 2020 book about the American dream, suggests Investopedia might have set too high a bar.
“I’m not sure we should equate the American dream with the lifestyle enjoyed by the top 10% of income earners,” he said.
To Strain, the American dream is more about a sense of upward trajectory: “Are you getting ahead?” he said. “Are you doing better year after year? Are your kids going to do better than you’ve done?”
The point of the Investopedia report, Silver said, is to get people thinking about how to finance their own American dream.
“We hope that people will read this and think about what their dream actually is, so they can put a price tag on it and then come up with real strategies to be able to earn enough money to achieve it.”
Here is a detailed cost breakdown of the American dream:
According to Investopedia, $1.64 million represents the average cost for 20 years of retirement. The tab is based on average annual expenditures in retirement.
A year ago, Investopedia estimated the cost of retirement at just under $1.6 million.
If those numbers seem high, consider that financial advisers often instruct retirees to plan on spending only 4% of their savings on annual living expenses. And 4% of $1.6 million is only $64,000.
That figure reflects the average cost of buying a home and financing it with a 30-year fixed-rate mortgage, including interest, insurance and property taxes.
A year ago, Investopedia estimated the cost of homeownership at $929,955.
The median price of an American home is about $415,000, the report says. The rest of the lifetime tab represents interest, insurance and taxes.
This figure reflects the cost of buying and financing a new car every 10 years from ages 22 to 75.
A year ago, Investopedia estimated the lifetime cost of new-car ownership at $811,440.
Investopedia’s survey found that 72% of Americans consider owning a new car a component of the American dream.
But not everyone agrees. The average vehicle in the United States is nearly 13 years old, a record high.
That figure covers the costs of raising two children through age 18, then paying for each to attend a public college at in-state rates for four years.
The total cost of raising two children comes to $645,819, Investopedia estimates. College expenses push the figure well past $800,000.
In past American dream reports, Investopedia didn’t include health care as a component: It’s a need, not a want, right?
Americans need health care, but they want quality health care. Most survey respondents said access to quality health care is part of their American dream.
The total represents average lifetime health care expenditures from ages 22 to 85.
Family walks on beach during sunset
According to the Investopedia survey, most Americans consider vacations a nonnegotiable component of the American dream.
The figure above represents one vacation a year from ages 22 to 85, assuming the average vacation costs $2,867.
A year ago, Investopedia estimated a lifetime of vacations costs $179,109.
Two-thirds of American households have pets, and most of us consider our furry friends a key piece of the American dream.
The figure above represents lifetime costs of owning just one dog and one cat, including food and health care.
More than half of Americans say a wedding is part of the American dream. Interestingly, wedding costs have actually declined since 2024.
The $38,200 total covers a ceremony, reception and ring.
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