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Today’s parents have to pay $3.4 million to fund the American Dream for themselves and their kids



  • A new Investopedia analysis found it costs $3.4 million to achieve key American Dream milestones.
  • For example, the analysis found it costs $576,000 to raise two kids.
  • It shows how high childcare and housing costs are straining Americans’ ability to start a family.

It’s more expensive than ever to achieve the key goals of the American Dream.

On December 5, Investopedia released an analysis on the costs of ten key milestones Americans seek to achieve — and the grand total for those milestones comes to $3.4 million. From housing, to childcare, to sending kids to college, the analysis highlighted core components of the American Dream that are increasingly placing a financial strain across all generations as they look toward starting a family and saving for retirement.

Investopedia noted that “rising costs have made the typical ‘American Dream’ out of reach for many. In fact, the average lifetime earnings of Americans across all education levels is approximately $2.3 million—that’s over one million short of the estimated cost of the American Dream.”

Specifically, per the analysis, raising two kids to the age of 18 costs $576,896, based on 2015 USDA data adjusted for inflation to 2022. On top of that, it costs an average of $796,998 to buy a home, according to 2023 purchase rates, and $934,752 for health insurance over 39 years of annual costs, based on Kaiser Family Foundation average family premium costs.

Other key lifetime milestones, like buying a car, paying one year of college tuition, owning a pet, or having a wedding, together add up to almost another half a million dollars.

Of course, not every family will choose to spend money on the expenses included in the analysis, but it’s a reflection of the economic strain Americans are continuing to feel as the country emerges from the pandemic. While inflation is cooling, many Americans still don’t feel good about today’s economy, especially as they’re beginning to feel the impact of the Federal Reserve’s interest rate hikes over the past year.

Americans’ salary expectations are also high right now — especially for millennials — as they struggle to afford the costs of key necessities. According to a survey released by financial services company Empower, conducted by The Harris Poll, millennials say they need a $525,000 yearly salary to be happy. While that’s much higher than Gen Z’s $128,000 estimate, it reflects how increasing consumer debt and rising childcare costs are straining millennial parents’ wallets.

Additionally, Business Insider recently reported that elder millennials — aged 35 to 45 — are in a particularly tricky situation because they’ve already seen two recessions and lived through a pandemic. A recent Bank of America note said those events might have set them behind younger millennials, and rising childcare costs and high debt loads aren’t making things easier.

“We believe many families in the youngest cohort we studied here — respondents born in the 1980s — are at substantial risk of accumulating less wealth over their life spans than the members of previous generations,” the note’s authors wrote.

Still, while older generations might not be starting families right now, economic conditions are also keeping some of them from retirement. Business Insider recently spoke to a 63-year-old who is struggling to afford his student-loan payments on top of healthcare and high inflation.

“I’m a year or two away from retirement,” he said. “Are they going to make me pay a fourth of my Social Security to pay off my student loans when I’m 66 years old?”

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