Can you afford the 'American Dream?' Study shows the ideal lifestyle costs $130,357 per year

superbeets · Jul 5, 2014

[h=1]Can you afford the 'American Dream?' Study shows the ideal lifestyle costs $130,357 per year[/h]

USA Today calculated the cost by adding expenses including home ownership, children, groceries, retirement planning, and health care

It's estimated only 1 in 8 households can afford the American Dream

Fewer families believe the Dream is in their reach, according to recent survey

superbeets · Jul 5, 2014

A new analysis shows that only 1 in 8 families could afford the cost of living what's commonly known as the American Dream in 2014.

Inspired by the new book 'Chasing the American Dream,' about the cost of the financial crisis, housing bubble, and Great Recession, reporters at USA Today calculated the cost of all those elements that make up the American Dream.

For the project they included the costs of home ownership, moderate-cost groceries, a car, health insurance, taxes, educational expenses for your children, and retirement planning.

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A new study shows only one family in eight can afford home ownership, children, retirement savings, and all the other things typically promised in the American Dream

superbeets · Jul 5, 2014

[h=3]WHAT IS THE COST OF THE AMERICAN DREAM? [/h]
Here's how USA Today broke down the average expenses to live comfortably and raise children:

Home ownership - $17,062 per year
Groceries - $12,659 for a family of four
Transportation - $11,039 a year for a four-wheel-drive SUV
Health Care - An average of $9,144 for out-of-pocket costs and premiums
Total taxes - Roughly 30 per cent of all income
Education - $4,000 per year for two children plus approximately $2,500 per child for college savings
Retirement - The maximum pretax contribution to a retirement plan for people under 50 in this income level is approximately $17,500

superbeets · Jul 5, 2014

They reached an average total of $130,357 per year in household income.

In a country where the median household income is roughly $51,000, that's a dream well out of reach for most people.

In fact only 16 million households in America earned that much last year.

Thomas Hirschl, a professor at Cornell University who co-authored the book, noted that most people surveyed did not desire to become one of the 1 per cent of earners, only to have a decent life.
'It's not about getting rich and making a lot of money. It's about security,' he said. He added that they also wanted to see their children succeed.

'They want to feel that their children are going to have a better life than they do,' Hirschl added.

superbeets · Jul 5, 2014

There are however massive variables depending on where one lives, with cities like Indianapolis and Tulsa being far more affordable than New York or San Francisco when you take taxes and housing costs into account.

They also noted that some groups - immigrants for instance - often lived with extended families that helped share the load.

Some business owners are even beginning to publicly speak out.

Recently, Starbucks CEO Howard Schultz announced a policy to help provide a college education for his employees.

'In the last few years, we have seen the fracturing of the American dream,' he told reporters.

And studies show more Americans understand their situations.

A 2008 Brookings Institution poll showed roughly three-quarters of Americans said that the American Dream was harder to attain.