A recent survey revealed that about 63% of Americans have had to abandon key financial objectives such as buying a home or starting a family due to the rising cost of living. The survey, which was conducted by U.S. Bank and involved 5,000 participants, showed that concerns about financial stability are widespread, especially among younger generations.
Of the total survey respondents, 76% of Gen Z, 72% of Millennials, 66% of Gen X, and 45% of Baby Boomers shared that they had given up on a financial milestone due to prohibitive costs. The common goals that respondents have given up on predominantly involve home ownership and having children.
In addition, a troubling 81% believe that retiring will be more challenging for them than it was for their parents, attributable to the constant increase in the cost of living. This concern is evident, as about 63% fear they might need to return to work post-retirement.
Notably, despite such apprehensions, a majority of those surveyed believe they are successfully managing their credit card payments and job security. Yet, the threat of sudden job loss or accumulating credit card debt significantly contributes to their financial stress.
Scott Ford, U.S. Bank's President of Wealth Management, noted in the report that while Americans are striving to budget, invest, and cut back on spending, the general perception is that these efforts might not be sufficient for reaching larger financial goals, mainly because these goals are largely tied to uncontrollable economic forces.
Investopedia's latest annual estimates project an average "American Dream" comprising home and car ownership, marriage, having two children and pets, providing for healthcare and retirement, and affording annual vacations to cost over $5 million over a lifetime.
Given the median earnings of a full-time American worker amount to about $62,192 per year, a person would need to maintain this income for approximately 81 years to afford the "American Dream"- a duration surpassing the average U.S. lifespan of 78.4 years. With a typical 50-year working lifespan, average Americans can expect lifetime earnings of about $3.11 million, nearly $2 million short of the estimated cost of the "American Dream".