Attaining the “American Dream” has become an increasingly expensive proposition, now costing an estimated $3.45 million over a lifetime.
Previously symbolizing the potential for upward mobility, the concept — emblematic of financial success and a comfortable lifestyle complete with marriage, children, home ownership, and education— has become less accessible.
The contrast with reality is stark, considering that the average American’s lifetime earnings across all education levels hovers around $2.3 million, as reported by the Georgetown University Center on Education and the Workforce.
A study by Investopedia, as reported by Yahoo!, reveals the eye-opening costs incurred by a hypothetical American family of four striving for this dream.
Getting married comes at an average cost of $35,800, inclusive of the engagement ring and ceremony, referencing data from The Knot in 2022. Buying a home with a mortgage, factoring in a 10% down payment and a 30-year fixed interest rate, reaches an average of $796,998, using figures from Zillow and federal financial agencies as of September 2023.
Then there are children. On average, the out-of-pocket expense for giving birth to two children in a hospital is $5,708 for those with a large group health plan.
That’s the easy part. Up to the age of 18, the cost for raising two children is pegged at $576,896, adjusted for 2022 inflation from the USDA’s report. Sending them to college will cost you an average of about $42,000 a year.
A massive expense is health care. The cumulative lifetime premium costs for an average family health plan can reach $934,752, according to data from KFF’s 2023 survey.
Then there’s transportation. Spanning a lifetime, the total cost of owning cars amounts to about $271,330, considering purchasing used vehicles every six years. Caring for a dog and cat, each expected to live 15 years, will also cost you, from $34,948 to $100,922 according to a 2022 Synchrony study.
Then there’s retirement. The estimated savings required for a retiree to maintain 80% of their pre-retirement income is $715,968, calculated using median household income data and life expectancy rates from the CDC.
Even being dead costs money. The average expense for a traditional viewing and burial funeral service is $7,848, a 2023 figure from Policygenius says.
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