Owning a home, raising a family, and retiring comfortably now costs an estimated $5.3 million over a lifetime — and Americans’ wages are falling further and further behind.
That’s according to Investopedia’s annual analysis of what it costs to reach eight classic life milestones: owning a home, buying new cars, raising two kids and sending them to college, retiring, paying for health care, getting married, owning pets and taking an annual vacation. The total increased 4.1% from last year, from $5.11 million to about $5.32 million. As recently as 2023, the same set of steps cost about $3.4 million. Fortune reported last year that it takes at least $5 million – and a college degree – to achieve the American dream, down from the multi-million dollar figure in 2024.
What’s in the $5.3 million prize
Home ownership remains the most important position. The lifetime cost of owning and maintaining a home increased 7.7% to approximately $1.28 million, an increase of more than $91,000 in a single year.
The fastest growing category is raising two kids and sending them to college. That cost jumped nearly 9 percent, from $876,000 to about $954,000, due to higher in-state child care and tuition. Replacing two new cars every five years adds about $1.21 million over a lifetime, and retirement costs are about the same.
Health care was the only category to become less expensive, going from $414,000 to $413,000. Smaller steps add up, too: about $38,800 for a wedding, about $40,800 to care for a cat and dog, and nearly $187,000 for a lifetime of annual vacations.
Salaries do not follow
While the cost of dreaming increased 4.1%, private sector wages and salaries increased just 3.1% over the same period, according to Investopedia’s analysis of Bureau of Labor Statistics data.
Investopedia estimates that a full-time worker with a bachelor’s degree earns about $3.6 million between the ages of 25 and 64, before income taxes. Adding 20 years of average Social Security benefits, or about $2,071 per month, brings the lifetime income to about $4.1 million. The worker is therefore missing approximately $1.2 million. And that scenario assumes a college degree, which many Americans don’t have.
The squeeze is evident all along the income scale. Even most six-figure earners say buying a home seems unattainable. Meanwhile, 8 in 10 Gen Z and millennial workers report working two jobs to make ends meet.
Property is distributed according to income
Housing is the largest expense for most families, according to the Federal Reserve’s 2024 Report on the Economic Well-Being of American Households. This makes housing decisions a major factor in a family’s financial situation.
In 2024, 63% of adults owned their home and 28% rented, but ownership varied greatly by income. Only 35% of adults earning less than $50,000 owned a home, compared to 85% of those with household incomes of $100,000 or more.
The gap was even wider for adults under 60. In this group, the homeownership rate among those earning more than $100,000 was more than three times that of those earning less than $50,000. The Fed offered two possible explanations. Older people often purchased their homes during their working years and now rely less on income to maintain them. Home prices have also outpaced income growth, making it harder for low-income young adults to buy than for previous generations.
Most renters said money was the reason they rented. Sixty-eight percent said they couldn’t afford a down payment, 49% said they couldn’t afford a monthly mortgage payment, and 42% said they couldn’t qualify for a mortgage. It’s one of the reasons Gen Z is rewriting the American dream to avoid the mortgage. Despite this, Warren Buffett’s successor at Berkshire Hathaway is betting big on housing in the United States.
Tenants reach record high
Renting offers little relief. The Harvard Joint Center for Housing Studies Rental Housing in America 2026 The report found that a record 22.7 million renter households faced high costs in 2024, meaning they were spending more than 30% of their income on rent and utilities. That’s almost half of all U.S. renters. Around 12.1 million of these households were severely affected, spending more than half of their income on housing.
Rent growth has slowed since the peak of the pandemic, hovering near zero between mid-2023 and 2025, and rents for new leases are now down slightly. But affordability has not recovered as rents have outpaced renters’ incomes for two decades. Households earning less than $30,000 had a record $210 a month left after paying for their housing.
Americans are losing confidence
Most Americans still believe they will achieve the American dream, but that confidence is waning. A Gallup poll released in June found that 69% of American adults expect to achieve this personally, down from 2024. As the country approaches its 250th anniversary, about half of Americans say the American dream is no longer true and that younger generations are on track to earn less than their parents.
Business leaders have noticed. JPMorgan CEO Jamie Dimon has warned that the American dream is slipping away. New York City Mayor Zohran Mamdani said that to achieve this now requires “a lot of luck.”
Whether the dream is even within reach depends heavily on where you live and what you earn. According to the Fed, the median monthly mortgage payment was about $1,811 in the West, compared to $1,300 in the Midwest.
This story was originally featured on Fortune.com
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