Visualizing the Cost of the American Dream in 2024

Dorothy Neufeld
2024-10-24 13:15:00
www.visualcapitalist.com

Visualizing the Cost of the American Dream in 2024

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Today, the rising cost of living is making the American dream increasingly difficult to achieve.

While pandemic-led wage growth boosted real incomes, it followed five decades of stagnant wage increases. At the same time, housing prices have soared. Pushing up prices are a limited supply of homes, with home construction plummeting 55% compared to 2006. Together, these broad economic forces have made it harder to get ahead, even with a competitive salary.

This graphic shows the estimated cost of the American dream per household over the course of their lifetime, based on analysis from Investopedia.

The American Dream Costs a Hefty $4.4 Million

Below, we breakdown each aspect of the American dream by their lifetime cost as of 2024:

The total cost of the American dream is no small sum—$4.4 million—exceeding the average lifetime salaries of both men ($3.3 million) and women ($2.4 million) with a Bachelor’s degree.

Overall, the largest cost is paying for a comfortable retirement. Here, it takes $1.6 million in savings, assuming a 4% annual withdrawal rate and inflation averaging 2.5% per year to retire for 20 years. Notably, the decline in private pension schemes has played a large role in making financial security in later years harder to achieve compared to previous generations.

Unsurprisingly, owning a home was the second-biggest expense, at $930,000 for an existing single-family home. Given the surging cost of home prices, 77% of U.S. households are unable to afford a median-priced home in 2024.

As fertility rates in America hit historic lows, raising two children and sending them to college would cost $832,000 overall. Today, 36% of Americans under 50 who don’t have children cite affordability concerns as a major reason for not having kids. Moreover, average college tuition costs have climbed a remarkable 748% since 1963, after adjusting for inflation.

Following a similar trend, wedding costs, too, have skyrocketed. Between 2019 and 2023, average costs increased by $4,000 alone amid inflationary pressures and pandemic backlogs. Today, it costs over $44,000, including the ceremony, reception, and engagement ring to say “I do”.

Learn More on the Voronoi App

To learn more about this topic from a home ownership perspective, check out this graphic on the salary needed to buy a home in 50 U.S. cities.

The post Visualizing the Cost of the American Dream in 2024 appeared first on Visual Capitalist.

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