In theory, anyone can achieve the American Dream. But at what price?
A recent analysis by Investopedia found that it would take $5 million over a lifetime to fund eight key components of the American Dream, including homeownership and raising children.
Dreams are different for each person. But as Investopedia’s September report reveals, some human needs are universal.
In an accompanying survey, the financial journalism site asked 1,263 adults to identify goals related to the American Dream. Most people said they shared eight aspirations:
- A comfortable retirement (86%)
- Able to provide high quality medical care (86%)
- Own a home (85%)
- Raise a family (78%)
- Own a new car (72%)
- Go on vacation every year (71%)
- Pet care (66%)
- Have a wedding (55%)
This report leverages data from federal agencies, think tanks, and industry associations to tabulate the lifetime costs of each goal.
Rethinking the American Dream: College and University Degrees.
High school students and their parents are weighing the benefits of colleges and universities.
Here’s how much it costs to realize the American Dream
List the lifetime costs of each goal from highest to lowest.
- Severance: $1.6 million
- Home ownership: $957,594
- New car ownership: $900,346
- Raising two children and paying for college: $876,092
- Healthcare: $414,208
- Annual vacation: $180,621
- Pet: $39,381
- Wedding: $38,200
Add these up and the lifetime cost of achieving the American Dream is $5,043,323.
That’s a mind-boggling amount, considering the average American with a bachelor’s degree earns about $2.8 million over their lifetime.
The American Dream is getting more expensive
During his 2024 election campaign, presidential candidate Donald Trump vowed to “bring back the American Dream.”
But the numbers suggest that dream is becoming increasingly expensive. Investopedia found that most components of the American Dream cost more in 2025 than in 2024, the last time the site tallied costs.
Caleb Silver, People Inc.’s business editor and editor-in-chief of Investopedia, told USA TODAY in September.
According to Investopedia, the lifetime cost of a new car will be $900,346 in 2025, compared to $811,440 a year ago. The cost of owning a home for life increased from $929,955 to $957,594.
However, not everyone defines the American Dream the same way.
Michael Strain, a senior fellow at the American Enterprise Institute and author of a 2020 book on the American Dream, suggests that Investopedia may have set the bar too high.
“I don’t know if we should equate the American Dream with the lifestyle enjoyed by the top 10 percent of earners,” he said in a September interview.
For Strain, the American Dream is more of a sense of upward trajectory: “Are we moving forward?” he said. “Are you getting better grades every year? Will your kids be better than you?”
The purpose of the Investopedia report is to get people thinking about how to finance their American Dream, Silver said.
“I hope people can read this and think about what their dream actually is, put a price tag on it, and come up with a real strategy that allows them to make enough money to achieve it.”
Here’s a detailed cost breakdown of the American Dream:
Severance: $1.6 million
According to Investopedia, the average cost of retirement over 20 years is $1.64 million. This tab is based on your average annual spending after retirement.
A year ago, Investopedia estimated the cost of retirement to be just under $1.6 million.
If these numbers seem high, consider that financial advisors often tell retirees to plan to spend only 4% of their savings on annual living expenses. And 4% of $1.6 million is only $64,000.
Home ownership: $957,594
This figure reflects the average cost of purchasing and financing a home with a 30-year fixed-rate mortgage, including interest, insurance, and property taxes.
A year ago, Investopedia estimated the cost of homeownership to be $929,955.
The median home price in America is about $415,000, according to the report. The remaining lifetime tabs represent interest, insurance, and taxes.
New car ownership: $900,346
This figure reflects the cost of purchasing and financing a new car every 10 years for a two-car household between the ages of 22 and 75.
A year ago, Investopedia estimated the lifetime cost of owning a new car to be $811,440.
An Investopedia study found that 72% of Americans believe owning a new car is part of the American Dream.
But not everyone agrees. The average age of a car in the United States is nearly 13 years, an all-time high.
Raise two children: $876,092
This figure covers the cost of raising two children to age 18 and then attending a public university at in-state rates for each of them for the next four years.
Investopedia estimates that the total cost of raising two children is $645,819. College costs well over $800,000.
These costs partly explain why fewer Americans are choosing to have children.
Healthcare: $414,208
In past reports on the American Dream, Investopedia did not include healthcare as a factor. Healthcare is a need, not a want.
Americans need health care, and they want quality health care. Most survey respondents say access to quality health care is part of the American Dream.
This total represents average lifetime health care spending from ages 22 to 85.
Annual vacation: $180,621
According to research from Investopedia, most Americans consider vacations to be a non-negotiable part of the American Dream.
The chart above represents one vacation per year from ages 22 to 85, assuming an average vacation cost of $2,867.
A year ago, Investopedia estimated the cost of a lifetime vacation to be $179,109.
Pet ownership: $39,381
Two-thirds of American households own a pet, and most of us consider our furry friends to be an important part of the American Dream.
The diagram above shows the lifetime costs of owning one dog and one cat, including food and medical expenses.
For a wedding: $38,200
More than half of Americans say a wedding is part of the American Dream. Interestingly, the cost of weddings has actually decreased since 2024.
The total price of $38,200 includes the ceremony, reception, and rings.
