The American Dream has long symbolized the promise of opportunity, prosperity, and upward mobility. Coined in 1931 by writer James Truslow Adams in The Epic of America, the term described “that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.”
But nearly a century later, achieving that vision is more expensive than ever. According to new research published by Investopedia, the lifetime cost of attaining the traditional American Dream—including homeownership, retirement, raising children, a wedding, new cars, healthcare, pets, and annual vacations—now totals roughly $5 million. These calculations assume a college-educated, dual-income household capable of sustaining these ambitions over a lifetime.
Phillip E. Battin, president and CEO of Illinois-based Ambassador Wealth Management in Warrenville, Illinois, told Newsweek: “The American Dream is becoming harder to reach for many people. Wages for middle- and working-class Americans aren’t keeping up with the rising costs of things like housing, healthcare, and everyday expenses.”
Retirement: $1.6 Million
Retirement represents the largest single expense in the American Dream. Investopedia estimates that to maintain an average annual expenditure of $63,609 for those who are aged 65 and older over 20 years, adults need $1,636,881 saved, accounting for a 2.5 percent annual inflation increase.
However, while this is the ideal, that doesn’t mean it is easy to achieve.
“Almost half of Americans don’t have any retirement savings at all. Even those in the middle class are falling behind, with average savings around $134,000, which may not be enough to ensure financial security in retirement,” Battin said.
He added: “But there’s still hope. As the saying goes, ‘People don’t plan to fail; they fail to plan.’ For example, if a 25-year-old saves just $560 a month and earns 7 percent interest, they could have $1.6 million by age 67. That’s about $129 a week—not easy for every household, but doable for many.”
Healthcare: $414,208
Healthcare costs have soared over the past two decades, rising 5 to 6 percent annually, outpacing most other consumer expenditures. Investopedia calculates that from ages 22 to 85, the average adult will spend $414,208 on health-related expenses, including insurance, hospital care, medications, and long-term care.
“There’s no doubt that healthcare costs, inflation, and slow wage growth make life harder,” Battin said. “But Americans have faced and overcome huge challenges before—like wars, the Great Depression, and economic crashes.”
Homeownership: $957,594
For most Americans, owning a home is the most tangible sign of financial success. With median single-family home prices sitting at $415,000 in 2025, and 30-year fixed mortgages averaging 6.69 percent, homeowners face nearly double the purchase price over time when including interest, maintenance, and HOA (Homeowners Association) fees.
“Owning a home—once a cornerstone of the American Dream – is now out of reach for many younger people,” Battin said.
Despite rising costs, 85 percent of Investopedia’s survey respondents still consider homeownership a vital part of the American Dream.
Raising Children and College: $876,092
Raising two children from infancy through college remains one of the costliest undertakings. Using Economic Policy Institute data, Investopedia calculates $650,000 to cover childcare, transportation, meals, and other expenses, with college costs exceeding $230,000 for two children.
“College is more expensive than ever, and many students take on a lot of debt, only to find that their paychecks don’t grow fast enough to pay it off quickly,” Battin said.
According to the Education Data Initiative, the average cost of college is $38,270 per student per year, including books, supplies, and daily living expenses.
Purchasing New Cars: $900,346
Vehicle ownership is another central pillar, with 72 percent of respondents citing the ability to buy new cars as part of their dream. Financing two new vehicles every 10 years for a lifetime comes to $900,346, factoring in insurance, maintenance, and payments.
Rising car prices and insurance costs contributed nearly $90,000 to this total compared with 2024.
Annual Vacations: $180,621
The average household vacation may seem discretionary, but for 71 percent of Americans surveyed, it is non-negotiable. Investopedia calculated a lifetime cost of $180,621 based on a yearly $2,867 trip from ages 22 to 85.
Owning Pets: $39,381
Two-thirds of U.S. households own pets, and two-thirds of survey respondents consider having a furry friend essential to the American Dream. Lifetime costs for one dog and one cat average $39,381, including food, veterinary care, insurance, and boarding. This is up from $36,626 in 2024.
Weddings: $38,200
More than half of survey respondents—55 percent—consider weddings an essential part of the American Dream. Investopedia estimates the average cost at $38,200, lower than last year’s $44,300 bill.
The Cost of the Dream
Cumulatively, these eight pillars—bring the full lifetime cost of the American Dream to approximately $5 million.
“Today, the American people continue to adapt. Many pursue a side hustle or a second job, relocate for better employment opportunities, or temporarily use credit to make ends meet,” Battin said. “But unlike families in the past, most households today don’t have strong savings, pensions, or safety nets—making them more vulnerable when hard times hit.”
He continued: “The old dream of owning a home, having a steady job, and living debt-free is still possible—but it looks very different today. It may require more effort, flexibility, and creative thinking.”
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