The American Dream now costs $5.3 million, even a college degree may leave you $1.2 million short

The American Dream is getting out of reach for many Americans. According to an analysis by Investopedia, the cost of achieving the “American Dream” has soared to $5.3 million over a lifetime — nearly $2 million more than it was just three years ago, in 2023. The concept of the American Dream was first coined in 1931 by writer James Truslow Adams. In his book 'The Epic of America', Adams described it as “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.” Investopedia defines the American Dream as “owning a home, buying new cars, raising two children and sending them to college, retiring, paying for healthcare, having a wedding, owning pets, and taking a yearly vacation.”

The cost of the so-called American Dream was $5 million last year, $4.4 million in 2024 and just $3.4 million in 2023, the New York Post reported, citing Investopedia.

According to Investopedia, most full-time workers will not be able to achieve the American Dream even if they work from age 25 to 64.


“A full-time worker with a bachelor’s degree earns a median of about $3.6 million from age 25 to 64,” Investopedia said. That figure does not account for income taxes. “Add 20 years of the average Social Security retirement benefit, $2,071 a month, and that worker reaches about $4.1 million, roughly $1.2 million short of the American Dream,” the report added.

The cost of the American Dream

According to Investopedia, owning and maintaining a home is the single biggest expense in America now. As per the analysis, home ownership cost has soared to $1.28 million today, up from $1.18 million last year.

The second-largest cost is keeping two cars at about $1.21 million over a lifetime that includes insurance, maintenance, registration, and fuel for 15,000 miles. "The average amount for a new-vehicle loan hit just under $44,000 this year. More than a third of new-car loans now run longer than six years, lifting the average term to nearly 70 months," added the report.

Retirement cost is almost the same is likely to cost roughly the same amount, up 2.2% from last year.

The biggest increase is in the cost of raising kids. As per the analysis, raising two kids through the age 17 jumped 9% in a single year, rising from $876,000 in 2025 to $954,000 in 2026. The increase was driven by higher childcare costs and more expensive in-state college tuition.

Meanwhile, cost of yearly vacation jumped to $186,999 while the lifetime cost of keeping pets (one dog and one cat) can be as much as $41,000. Weddings meanwhile are the cheapest in the American dream; the cost of weddings in 2026 have jumped to $38,800, from $38,200 in 2025.

Healthcare was the only category that became slightly cheaper in 2026. with lifetime costs estimated at $413,000, down from $414,000 in 2025. The decline came after people aged 22 to 85 reported spending about $900 less, on average, on healthcare over the past year, according to the report.