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Is the American Dream dying?

It may be time to play an elegy for the American dream.

Only one-quarter of Americans say they're planning to retire according to the traditional sense of the word: stopping work and enjoying their golden years. That's just one finding in a new study from The Pew Charitable Trusts, which surveyed more than 7,000 households on their views on financial security. On top of that, half of Americans say they are financially insecure and cite worries ranging from a lack of savings, student loan and credit card debt, and a lack of income.

The findings paint a bleak picture of how American families view their financial status and future. In addition to being worried and stressed out, it's clear that many feel left out of the economic recovery. More than half said they aren't prepared for a financial emergency, while 55 percent said they're breaking even or even spending more than they make each month.

While that could represent spendthrift habits, household earnings have increased only 2 percent during the past 10 years, leaving many with the sense that their income is falling behind the cost of living.

"Participants were asked to define financial security," said Diana Elliott, research manager of The Pew Charitable Trusts' financial security and mobility project, on a conference call to discuss the study. The definition was "consistent and modest. It means families have enough to pay the bills, have a little left over for savings and have few worries about making ends meet."

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Pew Charitable Trusts

By that measure, she added, only half of Americans said their households were financially secure.

That affects how families view their goals and achievable futures, ranging from retirement to reaching a higher socio-economic status. At the same time, there's a disconnect between how Americans say they view the economy, with many feeling more favorable about it, while more say their own finances are in better shape than during the recession, Pew found. That echoes a recent CBS survey, which found that Americans' view of the economy is the highest in eight years.

Yet that isn't translating into dreams of moving up in the world. Asked what's more important, financial stability or climbing the income ladder, 92 percent of respondents opted for financial stability. Only 8 percent said higher income levels were more important. That might reflect the fact that so many Americans are lacking a basic financial foothold in the post-recession years.

Survey: Americans' worst retirement fears

"What we found is people have changed in terms of their perceptions of whether upward mobility from the bottom is possible," Elliott said. "In 2009, nearly 4 in 10 Americans felt it was common for someone to work hard and become rich. This has dropped to just 23 percent of Americans believing that. There is growing recognition that upward mobility from the bottom is challenging."

More Americans also sense that traditional retirement is out of reach. Only 26 percent of respondents said they plan to stop work entirely once they reach retirement age. More than half said they plan to do something else, including working at another job. And 21 percent said they aren't planning to retire.

That could reflect either a sense of enjoyment from working or the perceived need for income due to low retirement savings. While the survey didn't ask about the level of retirement savings, previous studies have found that many Americans are woefully underprepared.

Raising a middle class child costs nearly a quarter million

Four out of 10 Americans haven't started saving for retirement, either through an employer program or their own savings, according to an October study from investment firm BlackRock (BLK). On average, each American has socked away only about $58,000 for their retirements, or far less than the $1 million that experts say is needed to live on $40,000 a year in retirement for 30 years.

Not surprisingly, Americans with higher incomes and higher levels of education reported feeling more secure. More than three-quarters of households with incomes of $100,000 or more said they were financially secure, while 70 percent of those with postgraduate degrees said they were in stable financial shape. For those lacking a high school degree or earning less than $25,000 per year, financial stability reached only 37 percent and 29 percent, respectively.

A rebounding U.S. economy isn't translating into an easier time of it for many American families. Noted Elliott: "Many families do not perceive improvements in their own financial lives."

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