The American Dream now costs $5.3 million—and even college grads will fall $1.2 million short

Owning a home, raising a family, and retiring comfortably now costs a lifetime total of about $5.3 million, according to Investopedia's annual analysis. This figure has risen 4.1% from last year, reaching roughly $5.32 million from $5.11 million. Investing in children's education and healthcare also contribute to the expense, with costs for raising two children and sending them to college climbing nearly 9% in recent years.

Homeownership remains the biggest expense, with costs for owning and maintaining a home increasing by 7.7% to about $1.28 million. However, healthcare costs have dropped slightly, from $414,000 to $413,000. Paychecks have not kept pace with these rising costs, with private-sector wages growing only 3.1% compared to the 4.1% increase in the cost of the American Dream.

As a result, a full-time worker with a bachelor's degree is estimated to earn around $3.6 million between ages 25 and 64, leaving them about $1.2 million short of the $5.3 million target. The rising costs are affecting people across income levels, with homeownership rates varying significantly based on income. Only 35% of adults earning less than $50,000 own a home, compared to 85% of those with family incomes of $100,000 or more.