How Much the American Dream Costs for Boomers vs. Millennials

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The cost of the American Dream is much higher now than it was back in 1980, even after adjusting for inflation, according to national data.

For baby boomers, the American Dream was a GI Bill checklist: buy a home, raise a family, put the kids through college and retire without too much stress. Achieving the dream was doable, especially in an era of rising wages, affordable housing and employer-backed pensions. 

Millennials inherited that same dream but were expected to achieve the dream in the shadow of the 2008 financial crisis. The numbers tell the story: Nearly every piece of the classic American Dream has grown more expensive faster than wages have kept up. 

Here is how much parts of the American Dream cost for boomers vs. millennials. 

Also see three things to consider when pursuing the American Dream in 2025.

Housing

In 1980, when many boomers were entering the housing market, the median home price in the U.S. was $47,200, according to historical data from the U.S. Census Bureau. Adjusted for inflation, that’s nearly $195,000 in 2025 dollars.

As of April 2025, the median U.S. home price is $403,700, according to National Association of Realtors data. That represents a 107% increase beyond inflation, putting homeownership further out of reach for millennials, especially in major metropolitan areas.

Transportation

A new car in 1980 cost around $7,000, or almost $29,000 today with inflation adjustments, compared with the average price of a new vehicle in 2025, which is nearly $48,000, according to Kelley Blue Book.

With interest rates on auto loans topping 12%, millennials face higher monthly payments and longer financing terms, even for used vehicles. For millennials, owning a vehicle now represents a larger financial burden than it did for boomers at the same stage of life.

Raising Children

Raising a child in the 1980s to age 18 cost between $30,000 and $121,000, depending on the region and living standards, according to U.S. Department of Agriculture (USDA) estimates. 

According to a 2024 SmartAsset study, the median cost to raise a child in the U.S. is $22,850 per year — or $411,300 for 18 years. It noted, however, that these figures can range significantly based on location and other factors.

College Tuition and Debt

Obtaining a college degree is often touted as a cornerstone to achieving economic prosperity. For boomers, college was a stepping stone. For millennials, it’s often a source of decades-long debt.

According to data from the Education Data Initiative, in 1980, the average annual cost of tuition and fees at a public, four-year institution was $738, or about $3,033 in today’s dollars. Today, it would cost the average in-state student attending a public four-year institution and living on campus over $27,100 for just one academic year. 

In addition, millennials carry a significant share of the nation’s nearly $1.8 trillion in student loan debt, and 83% of millennials with student loan debt said they have put off major financial moves like buying a home or starting a business, per the Education Data Initiative. 

Retirement

Boomers benefited from widespread access to defined benefit pensions and more predictable retirement timelines. U.S. Bureau of Labor Statistics data found that in 1980, about 38% of private industry workers had access to a pension plan compared with 15% today, with most retirement savings now dependent on 401(k)s and IRAs. 

However, boomers also face retirement challenges. Social Security’s long-term solvency is uncertain, which could affect younger boomers as well as later generations.

In addition, the Trump administration’s proposal to eliminate taxes on Social Security benefits, eliminate the federal income tax and cut thousands of government jobs could affect boomers’ access to public programs they could need in their retirement years. 

Can Millennials Still Achieve the American Dream?

Achieving the American Dream is technically possible. However, for millennials, it means facing steeper financial hurdles, from buying homes to planning for retirement.

“When a generation lacks access to wealth building tools, it creates greater dependency on public programs and limits economic mobility,” said Sara Levy-Lambert, head of operations at Red Awning. “We risk entrenching inequality not through lack of effort, but through misaligned strategies.”

So what can millennials do? “Millennials should start by reframing what ‘wealth’ means. It’s not always about owning a single-family home; it’s about flexibility, agency and security,” Levy-Lambert said. 

Sources

• National Association of Realtors, “Existing-Home Sales Housing Snapshot.”
• Kelley Blue Blook, “Kelley Blue Book Report: New-Vehicle Prices Hold Steady in March as Sales Increase Ahead of Anticipated Tariff-Driven Price Hikes.”
• U.S. Department of Agriculture, “USDA Estimates of the Cost of Raising a Child: A Guide to Their Use and Interpretation.”
• SmartAsset, “Cost of Raising a Child Twice as High in Some States as Others – 2024 Study.”
• Education Data Initiative, “Average Cost of College by Year.”
• Education Data Initiative, “Average Cost of College & Tuition.”
• Education Data Initiative, “Student Loan Debt by Generation.”
• Sara Levy-Lambert, RedAwning

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