The American Dream has been a fundamental part of the national identity in the United States for many generations. At its core, it represents the belief that anyone—regardless of their background—can achieve success, prosperity and upward mobility through hard work and determination.
The term was coined by James Truslow Adams in his 1931 book—Epic of America—where he described it as a dream of a better and fuller life for everyone, with opportunities based on ability and achievement rather than circumstances of birth.
Adams wrote that it was a “dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement,” emphasizing social equality and the potential for individuals to reach their full potential regardless of their background. Adams distinguished the dream from materialism, asserting it was “not a dream of motor cars and high wages merely.”
He critiqued societal issues such as unbridled capitalism and growing wealth inequality, which he viewed as threats to the true essence of the Dream.
The American Dream is deeply intertwined with the foundational principles of the U.S., namely the rights to life, liberty and the pursuit of happiness. While it originally emphasized these fundamental and inalienable rights for all individuals—the freedom to live, to be free and to actively seek personal fulfillment—the concept has gradually shifted over time.
In its modern interpretation, the American Dream has come to place greater emphasis on material prosperity and economic upward mobility, encompassing milestones like attaining a degree, achieving homeownership, starting a family and having a stable job or owning a business.
However, the American Dream has become increasingly challenging and, for many, unattainable. A recent report by Investopedia found that the cost of the American Dream is now $4.4 million over the course of a lifetime.
Accumulating Money And Wealth
In today’s economic climate, the financial requirements for achieving the American Dream are out of reach for some individuals, as it costs over $1 million more than most Americans earn in a lifetime—not even factoring in essential costs such as food, healthcare, auto insurance and other basic necessities—the report stated.
Systemic challenges like the racial wealth gap and gender wage disparities, coupled with the ever-increasing cost of living, have made various components of the American Dream increasingly out of reach for a significant portion of the population.
The typical individual with a bachelor’s degree in the U.S. is projected to earn approximately $2.8 million over their career. Among these graduates, women are estimated to earn around $2.4 million, while men can expect to earn about $3.3 million, based on an analysis by the Georgetown University Center on Education and the Workforce utilizing data from the U.S. Census Bureau’s American Community Survey.
Alternatively, the financial requirements for achieving the American Dream align more closely with the potential earnings of a dual-income household. Examining the data from a household perspective reveals that the typical American household with two bachelor’s degree holders can expect to accumulate approximately $5.6 million in earnings over their combined careers.
Retirement
According to Investopedia’s report, the suggested minimum retirement savings for households aged 65 and above is roughly $1.6 million. This amount would allow for annual withdrawals of 4%, adjusted for 2.5% yearly inflation, over a 20-year period.
However, the reality of retirement savings in the U.S. falls short of this recommendation. The Federal Reserve’s 2022 Survey of Consumer Finances reveals that only about 54% of American families have retirement accounts. The median value of retirement accounts was $86,900, while the average was $334,000 in 2022.
Recent economic challenges, including high inflation, have further impacted retirement savings and increased debt levels. AARP’s Financial Security Trends survey from January 2024 shows growing uncertainty about retirement readiness. Approximately 33% of U.S. adults aged 30 and older who regularly save for retirement believe their current savings rate will be insufficient, up from 29% in January 2023. This increase in concern is particularly notable among adults 50 and older.
The survey also highlights that financial insecurity is more prevalent among single adults and those with lower household incomes. These groups generally have significantly lower incomes compared to married individuals, making it more challenging to save for retirement or emergencies. They are also more likely to struggle with high levels of debt, the survey found.
American Sentiment
Recent polling reveals a stark decline in Americans’ belief in the American Dream. A 2024 analysis by ABC News and Ipsos found that only about a quarter of Americans now believe in the concept of “if you work hard you’ll get ahead,” compared to half of respondents 13 years ago.
Specifically, just 27% of those polled say the American Dream still holds true, a significant drop from 50% in 2010. The number of people who believe the dream never held true has also increased dramatically, from 4% to 18%.
A majority (52%) now feel that while the American Dream was once valid, it no longer applies. In total, 69% of respondents indicate that the American dream is not a reality today, marking a 22 percentage point increase in skepticism.
The perception of the American Dream varies significantly across age groups. Older Americans, particularly those 65 and above, demonstrate a more optimistic outlook, with 41% believing that the American Dream remains attainable. This contrasts sharply with the views of younger age groups.
Among adults aged 30 to 64, only 24% share this belief, while an even smaller proportion (21%) of young adults aged 18 to 29 feel the American Dream is still viable.
This disparity in perspectives might be attributed to life experiences and current circumstances. The older generation may feel they have already realized the American Dream, having had more time to accumulate wealth and achieve their goals. Conversely, younger adults might perceive the Dream as increasingly elusive or still beyond their reach, possibly due to current economic challenges, rising costs of living or changing societal expectations.
Source: Forbes
