According to a barrage of studies and surveys, Americans are in miserable shape in saving for retirement: A majority will fall far short of what they'll need for a comfortable lifestyle. Worse yet, many will have to work well into old age as a way to make ends meet.
But what if many Americans were scrimping and sacrificing to pay for their golden years when they could loosen up and spend more now, or at least quit agonizing about the future?
That could be the situation for millions who follow the advice typically handed out by the financial services industry, said Laurence Kotlikoff, an economics professor at Boston University.
Standard retirement calculators "can easily tell a middle-class couple to save four times more than they should," said Mr. Kotlikoff.
He said the financial services industry, including behemoths such as Fidelity Investments, Vanguard Group, and TIAA-CREF, use scare tactics to pump up sales of mutual funds and other fee-based products and financial management services.
One who shares his view that Americans are doing a better job of saving than the industry typically proclaims is John Karl Scholz, economics professor at the University of Wisconsin at Madison.
"There's no huge retirement savings crisis," Mr. Scholz said.
Mr. Scholz examined the saving behavior of heads of households born from 1931 to 1941 and found roughly 85 percent were on track for maintaining their living standards as they age.
Although he and his colleagues did not study younger generations as closely, Mr. Scholz said other statistics suggest that baby boomers are similarly well-situated for retirement.
Industry leaders reiterated that their research shows Americans aren't saving enough.
But Mr. Kotlikoff criticizes the industry rule of thumb that retirees will need annual income equal to 75 percent to 85 percent of their pre-retirement income.
He said this calculation assumes "all the spending the person does before retirement will continue all the years after retirement," including for raising children, paying for college, and paying down a mortgage.
Mr. Kotlikoff said his analysis showed Fidelity's online calculator set savings targets 36 percent too high, Vanguard overestimated by 53 percent, and TIAA-CREF set a target 78 percent too high.
Mr. Kotlikoff said the goal of retirement planning should be to ensure a smooth living standard that "maximizes your happiness over your whole life.
"There is this sense that you can't save too much," he said. "That isn't true. You can save too much. I call it squandering your youth instead of your money."
The Block News Alliance consists of The Blade and the Pittsburgh Post-Gazette. Patricia Sabatini is a reporter for the Post-Gazette.