What’s Stopping You From Achieving the American Dream? Money—and Here’s How Much People Say They Need.

Brooke Scott wants to live her own version of the American dream, and she’s done the math. To get there, she said she needs an income of $300,000 a year.

That would allow her to pay a mortgage, raise kids, fund her retirement savings and live a life that feels secure and fulfilling, she said. The 32-year-old, who lives in Los Angeles and works as a litigation assistant, methodically detailed how she arrived at that figure, noting that $300,000 could be the total earned by her and her partner.

While Scott conceded that “you can definitely make it work with less than that,” she said she doesn’t want to struggle, and she wants to enjoy life. So for her, the American dream feels “out of reach in the present moment.”

She added: “You shouldn’t need this much just to make it work.”

The phrase “American dream” conjures visions of a better life. For many people it remains an ideal, but the obstacles to achieving it—or the perceptions of them—have changed over time.

When people were asked to identify what kept previous generations from achieving the American dream, they put discrimination, corruption and economic inequality at the top of the list, according to a YouGov poll conducted for MarketWatch. Today, the respondents said, the main barrier is everyday costs.

Three-quarters of people cited the cost of living as a major obstacle to attaining the American dream, according to the poll. Housing costs, healthcare costs and taxes were among the five most cited obstacles.
When asked about the barriers faced by previous generations, the cost of living ranked fourth.

“It was striking, when I was going through this, how many kinds of costs people were pointing to,” said Carl Bialik, U.S. politics editor and vice president of data science at YouGov.

YouGov conducted the survey in August. Separately, MarketWatch spoke with people about how much money they say they need to live the American dream.

The U.S. is two years removed from inflation rates that pushed prices of consumer goods and services up precipitously. October’s inflation rate dipped to 2.6% year over year, down from the four-decade high of 9.1% hit in June 2022.

But an affordability crisis remains, as many aspiring home buyers, would-be car buyers and parents paying for child care would attest.

Voters in this year’s elections also said so loud and clear, expressing their financial frustrations in a race that sent former President Donald Trump back to the White House. For months, Republican nominee Trump and his Democratic rival, Vice President Kamala Harris, sparred over who would best be able to bring down burdensome costs.

In polls conducted both before and after the election, respondents repeatedly ranked the economy as one of their most important issues, if not the single most pressing one. But high prices aren’t simply a day-to-day problem, people say: Elevated costs are also weighing on their concept of success and their ability to get ahead.

“My version of success is being able to live comfortably with a reasonable amount of excess so that you don’t worry … about making ends meet. Not being a baller and having tons of money, but enough that you can do extra things with your life,” said Christopher Kneeland, 23, who’s been searching for a marketing job since graduating from college last spring, and taking on freelance work while he looks.

To achieve that measure of success, Kneeland, who lives in the greater Boston area, said he’d have to earn between $150,000 and $200,000 a year. That would be roughly twice the median U.S. income, which was $80,610 last year, according to Census Bureau data, and higher than the nearly $100,000 median income in Massachusetts.

The salary Kneeland aspires to would put him right around the $186,000 average that people say they would need to live comfortably, according to one national poll conducted in May.

Kneeland’s mother is a hairdresser who is now semi-retired after years in the business. At one point she owned her own beauty parlor. His father is nearing retirement after a career in building maintenance.

They’re homeowners who raised two kids in the Boston area and got their piece of the American dream, he said.

Could they achieve the same goals in today’s economy? “I don’t think they could,” Kneeland said.

Dimmed, but not snuffed out

In 1931, historian James Truslow Adams wrote about what he called “that American dream,” defining it as “a better, richer, and happier life for all our citizens of every rank” and calling it “the greatest contribution we have as yet made to the thought and welfare of the world.”

But Adams “didn’t invent the concept,” said John Haddad, a professor of American studies at Penn State Harrisburg. “He gave it a name.”

The uniquely American spin on the idea that hard work leads to a better life can be traced back to the Puritans. The theme also appeared in Benjamin Franklin’s influential autobiography, written in the late 1700s, and in writer Horatio Alger’s rags-to-riches stories in the late 1800s, Haddad said.

But it was the economic boom that followed World War II that defined what Haddad says was the “greatest period of the American dream,” stretching roughly from 1945 to the early 1970s.

That era was ushered in by the Servicemen’s Readjustment Act of 1944—commonly known as the G.I. Bill—which Haddad calls “arguably the greatest piece of legislation in U.S. history.” The law solved an affordability challenge, he said, by giving veterans the ability to obtain home loans and college educations. “The G.I. Bill really gave access to the American dream. It gave you the ladder.”

Many Black veterans, however, were denied the benefits the law provided to white veterans, which helped fuel racial wealth gaps that still persist.

Haddad defines the American dream as “becoming your best self, forming a vision of your future self and then methodically taking steps necessary to actualize that vision.” That could mean becoming rich or being a community leader or a good parent or something else, he said. “You get to decide what your American dream is.”

How people today define the American dream

When YouGov asked what the American dream means to people today, many responses had to do with money, including “becoming debt free,” “being able to achieve what I want to do in life,” “being able to afford a house and raise a family,” to “raise a family relatively easily without working two jobs” and “to live and survive in America.”

Among 100 responses randomly selected from the total sample of over 1,100, Bialik said, around half were “explicitly economic” and another quarter were economic by implication, with references to success. The remainder mostly focused on freedom and patriotism, he said.

For several years, YouGov has been asking about the American dream and whether people think it’s personally attainable. Most people say the idea is still alive, but younger people aren’t convinced they can achieve it. “It’s fallen off quite a bit,” Bialik said.

Don’t tell that to Wellington Moreno, a naturalized U.S. citizen who was born in the Dominican Republic and came to the U.S. around age 4. “It’s obtainable. It’s beautiful. It’s worth celebrating,” he said.

His aunts, uncles and cousins who still live in the Dominican Republic cope with power outages, spotty internet and worries about crime that many Americans may not understand firsthand.

“I have a certain perspective on what really poor actually is, and how high you can go,” Moreno, 35, told MarketWatch. “Here, the sky is the limit. The sky is not even the limit—it’s limitless.” Moreno, a former software engineer who lives in Las Vegas, is now a reservist in the National Guard and just got his real-estate license.

The cost of living is a stumbling block that Moreno said he knows well as he strives to stick to a monthly food budget for himself, his girlfriend and their 1-year-old daughter. But getting ahead is a mindset, he said, adding that he makes decisions that let him control what he can.

“The prices, the cost of living—these are things coming to us. It’s going to impact us, but what are we going to do about it?” said Moreno. “Go from dream to goal to plan to reality.”

A $1 million net worth and a paid-off house are the milestones for Moreno’s American dream. He’s 100% certain he’ll get there, he said.

Is the American dream easier to achieve than it used to be?

Back in Los Angeles, Brooke Scott, who is Black, remembers a story about when her family lived in Wichita, Kan., decades ago. Her mother had phoned a landlord who sounded excited to meet his potential tenants, but the man’s demeanor completely changed when Scott’s parents arrived to see the place. They successfully sued for housing discrimination, she said.

Even if prejudice and discrimination have receded as perceived barriers to a better life, they haven’t disappeared, people who spoke with MarketWatch said. Maybe they’re just “less visible, or internalized,” Scott said.

Racial discrimination still exists in the housing and labor markets, along with a racial wealth gap that persists between white, Black and Hispanic families. Redlining, a tactic used to prevent people of color from getting mortgages in certain areas, was outlawed by the 1968 Fair Housing Act, yet reports continue to show evidence of racial discrimination in mortgage lending, home appraisals and other areas.

In May, the Department of Housing and Urban Development announced new guidelines to guard against racial bias in the real-estate appraisal process. Under the Biden administration, the Justice Department has also prioritized pursuing redlining settlements against lenders it alleges have discriminated against borrowers of color.

Homeownership rates increased for all racial and ethnic groups between 2012 and 2022, according to the National Association of Realtors, but the increases were uneven, with Black homeowners seeing the smallest increase over that period.

Two-thirds of Black respondents to the YouGov survey said the biggest current barrier to achieving the American dream was the cost of living, followed by prejudice and discrimination. When asked about their perceptions of prior generations’ barriers, Black participants named prejudice and discrimination as the No. 1 barrier.

For the poll respondents as a whole, across all racial groups, prejudice and discrimination ranked ninth on the list of current perceived barriers. When asked about obstacles faced by previous generations, respondents said they thought prejudice and discrimination was the biggest one.

One encouraging sign, and one worrying one

Did the YouGov survey participants get it right about what used to make it hard to get ahead? It’s difficult to use current perceptions to gauge how hard it was for previous generations to achieve their version of the American dream. But Haddad agreed with the poll participants who counted prejudice and discrimination as the top hurdle for previous generations.

There are cultural clues to support that theory, he noted, like the widespread popularity in its day of Lorraine Hansberry’s 1959 play, “A Raisin in the Sun,” and the impact of Betty Friedan’s 1963 book, “The Feminine Mystique.”

Friedan studied dissatisfied housewives “almost like they are in someone else’s American dream, not their own,” Haddad said. Meanwhile, Hansberry’s play portrayed the diverging dreams of members of a Black family in Chicago as they purchase a home in an all-white neighborhood, a plot inspired by Hansberry’s family’s own experience with a racially restrictive covenant. The play’s title comes from the third line of Langston Hughes’s 1951 poem “Harlem,” which begins by asking, “What happens to a dream deferred?”

Haddad takes a long view of American history. The fading of prejudice and discrimination as a perceived barrier is encouraging, he said, but it’s discouraging that the cost of living has taken its place. “You need capital to launch yourself,” said Haddad, who is also the interim director of Penn State Harrisburg’s School of Business Administration. Women in particular feel that money pressures are holding them back, with 79% telling YouGov that the cost of living was a block to achieving their American dream, compared with 69% of men.

In 2017—before the recent inflation spike—a study tracked how finances have influenced people’s chances of achieving the American dream. The researchers noted that while the exact definition of that dream varies across generations, “one constant is that children expect to do better—or at least to have a good chance at doing better—than their parents.”

Those chances, however, have dwindled significantly over time. Children born in 1940 had a 9-in-10 chance of making more money than their parents, according to the study. Yet people born in the late 1980s had only a 50/50 chance of doing the same, the research said.

The researchers, including economist Raj Chetty of Harvard University, wrote that the best hope for reviving the American dream of children being better off than their parents is to have “economic growth that is spread more broadly across the income distribution.”

But as wages have largely stagnated over the past few decades, especially for low- and middle-income workers, the opposite has happened: Wealth in the U.S. is increasingly concentrated at the top. The richest 10% of American households held 66.9% of the country’s wealth during the first quarter of 2024. In 1990, the top 10% held 60.5% of the wealth, Federal Reserve data shows.

Would the conclusions Chetty and his colleagues reached in 2017 be any different if they ran their study again in 2024? While it’s difficult to say, he told MarketWatch in an email, “I’m guessing we’d be in roughly the same place.”

‘You really have to have tenacity’

With much of the responsibility for long-term financial planning falling squarely on the individual, people can succeed as long as they focus on saving, said Wellington Moreno, who uses a budgeting spreadsheet and follows the advice of Dave Ramsey, a popular personal-finance commentator who stresses personal responsibility.

“A great tool we have in this country is called the 401(k),” because it’s meant to focus the mind on retirement, Moreno said. After tapping into his retirement account to pay off debts when he was in his 20s, he said, “as a 30-year-old, I started at zero. I learned a lesson. You want to build that up and feed it.”

Of course, saving for later is just another cost, and it’s one that is required to a greater degree for people today than it was for previous generations. The guarantee of an employer-funded pension fell away as companies began pulling back on such plans with the advent of the 401(k) in the 1980s. Now the guarantee of Social Security payments seems wobbly, too: At the current rate of depletion of its trust funds, in 2035, Social Security will be able to pay out only 83% of scheduled benefits.

In 2035, Darwin Stephens, now 44, will be in the midst of his peak earning years. At that point, he’ll still have seven years before he can claim any Social Security benefits.

This fall, Stephens, who is a real-estate agent in Dallas, and his brother were visiting their 86-year-old grandmother when the topic of Social Security payments came up. The brothers told her they doubted they’d see those payments for themselves.

“Her eyes got so big—like, shocked,” Stephens said. He remembered laughing in frustration. As he saw it, her surprise captured how removed many older people are from the retirement-savings crisis that younger people are facing. It makes the YouGov polling results resonate with him.

“For the basic dream of being able to retire and not stress, she has it, and we don’t right now,” he said. That doesn’t even count the extra money it would take to build a business and give back to the community—two things Stephens said he wants to do.

He is getting his bachelor’s degree with the goal of one day running his own real-estate brokerage. “The road is harder. It’s much harder. You really have to have tenacity,” he said. “It does require you to have a certain mindset to be as successful as, or even better than, prior generations.”

How much would he need to earn in order to achieve his American dream? He puts the figure somewhere in the range of $150,000 to $180,000—at a minimum.

“I’ll get there,” he said. “I’m not doubting that, but I’m hoping it’s enough to do what I plan to do with my money.”