Does Debt Define the New American Dream?

There is great disparity in how people define the American Dream according to a new survey, and not surprisingly, getting out of debt represents the ultimate financial goal for many people.

The survey, conducted by GFK Custom Research for, found that most respondents (27.9%) said the American Dream is retiring financially secure at 65, though coming in at second place, 23% defined it as being debt-free. The other options were owning a home (18.2%), graduating from college or paying off your student loans (6.6%) and joining the 1% (4.3%). The responses were rounded out by: other (11.4%), none (0.2%) and don’t know/no response (8.5%).

These results were derived from about 1,000 complete interviews with Americans 18 and older, including an approximately equal number of men and women.

“The poll underscores something I have long suspected — there’s a great deal of nostalgia for a promise that increasingly and tragically no longer exists,” says’s Co-Founder and Chairman Adam Levin. “Once upon a time, the American Dream was owning a home full of thriving, college-bound kids, two cars and little debt. Now it appears that for many Americans, the American Dream has changed.”

Does Debt Define the New American Dream?

Age, Income & The American Dream

Respondents between the ages of 18 and 24 were most likely to define the American Dream as being debt-free and least likely to define it as joining the 1% or retiring financially secure at 65. On the other end of the spectrum, Americans 65 and older were mostly likely to name retirement as the American Dream.

The percentages that chose owning a home and graduating from college/paying off student loans as the definitions skewed younger, as well. Being debt-free, the second-most popular definition overall, was at least the second-most likely choice in all age groups, except in 25- to 34-year-olds.

The survey also asked people to identify their top short-term financial goal, meaning they hoped to address it in the next two years. A quarter of Americans aimed to be debt-free — it was the most popular choice among all age groups and all income levels.

Notably, the income bracket of less than $25,000 a year had the largest share of respondents with the goal of being debt-free, when compared to other income categories. The low-income group also posted the highest percentage of “don’t know/no answer” responses, 16.2%, of any group.

The other answers for the short-term goals include retiring financially secure at 65, buying a car or paying off your car loan, paying off your credit card debt, sending your children to college, buying a home, paying off your student loans, paying off your mortgage and buying a second or vacation home.

Among all age groups, 18- to 24-year-olds were most likely to name buying a car or paying off an auto loan as a top priority, and they were least likely to prioritize paying off credit card debt.

The Debt-Free Dream

When it comes to living debt-free, the survey showed that optimism diminished somewhat with age. While the majority of Americans believed they would likely live without debt at some point, 18- to 24-year olds were the most likely group to say so. Overall, 80.7% of Americans said they would likely live debt-free, compared to 88.8% of the youngest adults.

Adults ages 50 to 64 were the largest group among those who thought they would likely not live debt-free, with 21% of that age group responding negatively to the question.

Despite the slice of pessimism, Americans have several options for managing and eliminating debt. (If you’d like a better sense of how debt may be impacting your credit, check out the free Credit Report Card.)

Yet a Positive Outlook?

In addition to defining what the American Dream means to many Americans, the study found that the vast majority believe they will reach or have already achieved the American Dream, but most think others cannot attain that goal.

When asked if they are within reach of the American Dream, only 17.7% of people said no. The majority (54.3%) said yes and 24% said they have already done it. The remaining 4% did not know or gave no response.

Compare that with the 55.3% who said the American Dream is not within reach for most Americans. While only 41.4% think others can reach the American dream, 78.3% think they will or already have. (3.3% did not know or gave no response.)

Image: iStockphoto; Graphic: Christine DiGangi

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